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Updated for Income-tax Act, 2025 | Tax Year 2026-27
TDS Return Filing for Manpower Supply Agencies
Running a staffing or manpower supply agency means TDS from both sides: your clients deduct TDS from your invoices, and you deduct TDS on salary, sub-contractors, professionals, and rent. Missing a quarterly return brings late fees and notices. We handle your TDS computation, challan, Form 138 and Form 140 returns, and the Form 130 and Form 131 certificates, so your compliance stays clean.
- Form 138 and Form 140 filing
- Form 130 and Form 131 certificates
- Trusted by 50,000+ customers
Fee for TDS Return Filing for Manpower Agencies
One simple fee covers the TDS computation, challan, quarterly return, and the certificate. The TDS amount itself is paid separately to the government.
TDS Return | Form 138 | Form 140
₹1000
/ certificate
- TDS computation and reconciliation
- Challan of TDS payment
- Quarterly TDS return (Form 138 or Form 140)
- TDS Certificate (Form 130 or Form 131)
Quick Answer: TDS Returns for Manpower Supply Agencies
A manpower agency files Form 138 every quarter for salary TDS and Form 140 for TDS on non-salary payments to residents, such as sub-contractors, professionals, and rent. Both are due on 31 July, 31 October, 31 January, and 31 May. The agency issues Form 130 to employees and Form 131 to suppliers. It also claims credit for TDS its clients deduct from its invoices at 1% or 2% under Section 393(1), Table Sl. No. 6(i).
Two TDS Roles of a Manpower Supply Agency
Your agency is both a payer and a payee, so you have two sets of TDS tasks. Many agencies manage the first and miss the second.
| Role | What It Means | What You Do |
|---|---|---|
| Deductor (you pay) | You deduct TDS on salary, sub-contractors, professional fees, rent, and similar payments | Deduct, deposit, file Form 138 and Form 140, issue Form 130 and Form 131 |
| Deductee (client pays you) | Clients deduct 1% or 2% from your manpower invoices | Reconcile with Form 26AS and AIS, collect Form 131, claim credit in your ITR |
Which TDS Return and Certificate Forms Apply to Your Agency
| Payment | Quarterly Return | Certificate |
|---|---|---|
| Salary to your employees | Form 138 (earlier Form 24Q) | Form 130 (earlier Form 16) |
| Sub-contractors and manpower suppliers | Form 140 (earlier Form 26Q) | Form 131 (earlier Form 16A) |
| Professional fees and rent | Form 140 | Form 131 |
Note: Payments on or before 31 March 2026 follow the earlier forms and the Income-tax Act, 1961. Payments on or after 1 April 2026 follow the Income-tax Act, 2025 and the forms above.
TDS Rates on Manpower Supply Under Section 393
From 1 April 2026, payments for supply of manpower are treated as work under Section 393(1), Table Sl. No. 6(i). The same rates apply to your clients paying you and to you paying your own sub-contractors.
| Supplier Type | TDS Rate | Threshold |
|---|---|---|
| Individual or HUF | 1% | ₹30,000 single payment or ₹1,00,000 in the year |
| Company, firm, LLP, or other entity | 2% | ₹30,000 single payment or ₹1,00,000 in the year |
| Supplier without valid PAN | Generally 20% | Applies on each deduction |
Example: You bill a client ₹10,00,000 plus GST for supplied staff, with GST shown separately. The client deducts 2% on ₹10,00,000, which is ₹20,000, and you claim this as credit. If you pay a sub-contractor firm ₹3,00,000, you deduct 2%, which is ₹6,000.
What Our TDS Return Filing Service for Agencies Includes
TDS Computation
We compute TDS on salary, sub-contractor payments, professional fees, and rent with the correct rate and payment code.
Challan and Deposit
We prepare the challan details so your TDS is deposited correctly and on time every month.
Quarterly Returns
We prepare, validate, and file Form 138 and Form 140 so they match your challans and PAN data.
Certificates and Reconciliation
We help issue Form 130 and Form 131 and reconcile your clients' TDS with Form 26AS and AIS.
Documents and Data Needed for Agency TDS Returns
- TAN and PAN of the agency
- Payroll register with employee PAN and salary details
- Sub-contractor and vendor ledgers with PAN
- Rent agreements and professional fee invoices
- Challan details of TDS already deposited
- Previous quarterly returns, if any
- Client invoices and Form 131 certificates received
- TRACES and income tax portal login details, if available
How TDS Return Filing Works for a Manpower Agency
Collect your TAN and TDS data
Keep your TAN and PAN, payroll register, sub-contractor and vendor ledgers with their PANs, challan details, and earlier returns ready.
Classify every payment correctly
Separate salary, sub-contractor and manpower payments, professional fees, and rent, because each goes into a different return and has its own rate.
Deduct TDS and deposit it on time
Deduct at the earlier of credit or payment and deposit by the 7th of the next month using the correct payment code.
Prepare and validate the quarterly return
Prepare Form 138 for salary and Form 140 for non-salary payments to residents, and validate them to avoid default notices.
File the return on TRACES
File Form 138 and Form 140 by 31 July, 31 October, 31 January, and 31 May.
Issue TDS certificates
After processing, download Form 130 for employees and Form 131 for suppliers from TRACES and issue them on time.
Due Dates for Form 138, Form 140 and Certificates
| Quarter | Period | Return Due | Form 131 Due |
|---|---|---|---|
| Q1 | April to June | 31 July | 15 August |
| Q2 | July to September | 31 October | 15 November |
| Q3 | October to December | 31 January | 15 February |
| Q4 | January to March | 31 May | 15 June |
TDS deducted in a month is generally deposited by the 7th of the following month. Form 130 for salary is issued once a year after the tax year ends.
Interest, Late Fee and Other Consequences for Agencies
| Default | Consequence |
|---|---|
| TDS not deducted on time | Interest at 1% per month or part of a month |
| TDS deducted but not deposited on time | Interest at 1.5% per month or part of a month |
| Late filing of Form 138 or Form 140 | Late fee of ₹200 per day, capped at the TDS amount |
| TDS not deducted or deposited on payments | A part of the expense may be disallowed in your income tax computation |
Common TDS Mistakes Manpower Agencies Make
Skipping sub-contractor TDS
Paying other contractors for workers without deducting 1% or 2% when the limits are crossed.
Not reconciling client TDS
Losing credit because client deductions were never matched with Form 26AS and AIS.
Wrong PAN or codes
Entering incorrect PAN or payment codes, which leads to defaults and missing credit.
Mixing salary and contractor TDS
Reporting workers on your payroll and outside contractors in the wrong return.
Agencies also need GST in place. See our guide to GST registration process for service providers and our GST return filing service with transparent pricing.
Need Help With Your Agency's TDS Returns?
Chat with our tax expert on WhatsApp for help with TDS rates, challans, quarterly returns, and certificates.
Chat on WhatsApp: +91 98182 09246Frequently Asked Questions on TDS Returns for Manpower Agencies
Do manpower supply agencies need to file TDS returns?
Yes, if the agency deducts TDS on salary, sub-contractor payments, professional fees, rent, or other payments. A TDS return must be filed every quarter, even when the amount is small.
Which TDS return forms do manpower agencies file?
Form 138 is filed for salary paid to employees, and Form 140 is filed for non-salary payments to residents such as sub-contractors, professionals, and landlords. They replace Form 24Q and Form 26Q for tax year 2026-27.
Is a TAN mandatory for filing TDS returns?
Yes. Every agency that deducts TDS on salary or contractor payments needs a TAN to deposit tax and file Form 138 or Form 140. A TAN is not needed only for property TDS.
What are the due dates for TDS returns for manpower agencies?
Forms 138 and 140 are due on 31 July, 31 October, 31 January, and 31 May for the four quarters. TDS deducted in a month is generally deposited by the 7th of the following month.
What TDS must an agency deduct when it pays sub-contractors?
If the agency pays another contractor to supply workers, TDS is deducted at 1% for an individual or HUF and 2% for others when a single payment exceeds ₹30,000 or yearly payments exceed ₹1,00,000.
How does an agency claim TDS deducted by its clients?
Clients deduct 1% or 2% from the agency's invoices. The agency can see this credit in Form 26AS and AIS and in the Form 131 certificates, and claims it in its Income Tax Return after matching it with its own books.
What if a client's TDS does not show in Form 26AS?
The credit appears only when the client reports the deduction in its Form 140. Ask the client to file or correct its return, and keep the invoice and payment records until the credit is reflected.
Which TDS certificates must a manpower agency issue?
The agency issues Form 130 to employees for salary TDS and Form 131 to suppliers, professionals, and landlords for non-salary TDS.
What is the penalty for late filing of a TDS return?
A late fee of ₹200 per day applies until the return is filed, capped at the TDS amount. Interest of 1% per month applies if TDS is not deducted on time and 1.5% per month if it is deducted but not deposited on time.
Is TDS deducted on the GST amount in a manpower invoice?
Where GST is shown separately in the invoice, TDS is generally deducted on the amount excluding GST. Ask your clients to follow the same rule so your credit matches your invoices.
Keep Your Manpower Agency TDS-Compliant
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Apply NowThis page is for general information based on the Income-tax Act, 2025 and current guidance. Please confirm your specific case with a tax professional.