Form 140 Gross Amount Reporting When Aggregate TDS Threshold Is Crossed

[Rajagopal K]

I request views of tax professionals and TDS experts on the following issue under the Income-tax Act, 2025, regarding Form 140.

A manufacturing company engages ABC Manpower Services Pvt. Ltd. for manpower supply. The agency raises a monthly bill of Rs. 20,000.

Month	Bill	Cumulative
April	Rs. 20,000	Rs. 20,000
May	Rs. 20,000	Rs. 40,000
June	Rs. 20,000	Rs. 60,000
July	Rs. 20,000	Rs. 80,000
August	Rs. 20,000	Rs. 1,00,000
September	Rs. 20,000	Rs. 1,20,000

Each bill is below the Rs. 30,000 single-payment threshold. The aggregate exceeds Rs. 1,00,000 in September at Rs. 1,20,000.

As the contractor is a corporate entity, TDS is 2%, making TDS on Rs. 1,20,000 Rs. 2,400.

Issue

For the Q2 Form 140 TDS return, what Gross Amount should be reported?

Option A - Cumulative: Rs. 1,20,000; TDS Rs. 2,400.

Option B - Q2 Amount: Rs. 60,000; TDS Rs. 2,400.

Under Option B, only July-September payments are reported. The Rs. 2,400 TDS represents 2% of the cumulative Rs. 1,20,000 after the threshold is crossed.

The company's P&L records Rs. 1,20,000 manpower expenditure for April-September.

Expert Opinion Requested

1. Which is correct for Q2 Form 140: Rs. 1,20,000 or Rs. 60,000?

2. When the Rs. 1,00,000 aggregate threshold is crossed during Q2, does Form 140 require cumulative reporting from April, or only Q2 payments/credits?

3. If Option B is correct, what is the statutory basis for reporting Rs. 2,400 TDS against Rs. 60,000 Gross Amount when the rate is 2%?

4. If Option A is correct, what provision of the Income-tax Act, 2025, Income-tax Rules, 2026, Form 140, RPU or FVU instructions supports cumulative reporting?

5. Which method correctly reconciles Form 140 with the Rs. 1,20,000 P&L expenditure?

Kindly provide an expert opinion based on the statutory provisions and official Form 140/RPU/FVU instructions, citing the relevant section, rule or form-field reference wherever possible.

The purpose is solely to determine the correct TDS-return reporting methodology when the aggregate threshold is crossed during the quarter.

AI Summary

Aggregate TDS threshold reporting: Form 140 gross amount may require cumulative or quarterly disclosure after threshold crossing.
Form 140 reporting is questioned where recurring payments cross the aggregate TDS threshold during Q2. The issue is whether gross amount should be reported cumulatively from April to September at Rs.1,20,000 with TDS of Rs.2,400, or only for Q2 at Rs.60,000 while reporting the same TDS. Resolution depends on whether Form 140 requires cumulative reporting after threshold crossing or quarterly reporting of payments or credits, and on reconciliation with recorded manpower expenditure.