diff --git a/teps/0040-capture-step-exit-code.md b/teps/0040-capture-step-exit-code.md
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+---
+status: proposed
+title: 'Capture Step Exit Code'
+creation-date: '2021-01-06'
+last-updated: '2021-01-06'
+authors:
+- '@pritidesai'
+- '@afrittoli'
+---
+
+# TEP-0040: Capture Step Exit Code
+
+<!-- toc -->
+- [Summary](#summary)
+- [Motivation](#motivation)
+  - [Goals](#goals)
+  - [Non-Goals](#non-goals)
+  - [Use Cases](#use-cases)
+- [References](#references)
+<!-- /toc -->
+
+## Summary
+
+Tekton tasks are defined as a collection of steps in which each step can specify a container image to run.
+Steps are executed in order in which they are specified. One single step failure results in a task failure
+in turn results in a pipeline failure. Once a step results in failure, rest of the steps are not executed.
+
+Many common pipelines have requirement where a step failure must not halt the entire execution. In order to
+continue executing a task even if a step fail, pipeline authors have flexibility of wrapping an image and
+exiting that task with success. This changes the failing task into success and does not block further
+execution. This is a workaround and only works with images which can be wrapped. This workaround does not apply
+to off-the-shelf container images.
+
+As a pipeline execution engine, we want to support off-the-shelf container image as a step and provide
+an option to capture non-zero exit code. The pipeline author can choose to continue execution after capturing
+the non-zero exit code and make it available to access it after the execution.
+
+Issue: [tektoncd/pipeline#2800](https://github.com/tektoncd/pipeline/issues/2800)
+
+
+## Motivation
+
+It should be possible to easily use off-the-shelves (OTS) images as steps in Tekton tasks. A task author has no
+control on the image but may desire to capture an error and continue executing the pipeline.
+
+### Goals
+
+Design a step failure strategy so that the task author can control the behaviour of the image and decide to
+continue execution or not.
+
+Prevent a task from failing when a step fails.
+
+Store the container termination state or error state and make it accessible after the pipeline finishes execution.
+
+This proposal must be applicable to any container image including custom images and off-the-shelf images.
+
+### Non-Goals
+
+This design is limited to a step within a task and does not apply to pipeline tasks.
+
+### Use Cases
+
+As a pipeline author, I would like to design a task with multiple steps. One of the steps is running an
+enterprise  image to run unit tests, and the next step needs to report test results even after a previous
+step results in failure due to tests failure.
+
+
+## References
+
+* https://github.com/tektoncd/pipeline/issues/2800
\ No newline at end of file
diff --git a/teps/README.md b/teps/README.md
index 1027750c4..c75ce6c8a 100644
--- a/teps/README.md
+++ b/teps/README.md
@@ -147,3 +147,4 @@ This is the complete list of Tekton teps:
 |[TEP-0032](0032-tekton-notifications.md) | Tekton Notifications | proposed | 2020-11-18 |
 |[TEP-0035](0035-document-tekton-position-around-policy-authentication-authorization.md) | document-tekton-position-around-policy-authentication-authorization | implementable | 2020-12-09 |
 |[TEP-0036](0036-start-measuring-tekton-pipelines-performance.md) | Start Measuring Tekton Pipelines Performance | proposed | 2020-11-20 |
+|[TEP-0040](0040-capture-step-exit-code.md) | Capture Step Exit Code | proposed | 2021-01-06 |