The Income Tax Department has announced an advisory that you can correct any mistakes related to TDS and TCS statements for tax periods from the fourth quarter of the financial year 2018-19 up to the third quarter of 2023-24. You have until March 31, 2026, to submit these corrections.
If your bank, employer, property buyer, or anyone else deducted the wrong amount of tax or sent the correct tax amount with incorrect details, make sure to request a correction before the deadline. If you miss this date, you could lose the credit for the tax that was already deducted, and you’ll have to pay the tax again. Additionally, you might receive a notice if you have any outstanding tax issues that need to be resolved.
IT Department Concerns for the TDS Correction Statement
As per the official Income Tax Advisory, below are the details:
- The Income Tax Act 1961 stands repealed w.e.f 01.04.2026 by virtue of section 536 of the Income Tax Act 2025.
- Additionally, as per Section 397(3)(f) of Income Tax Act, 2025, deductor/collector may provide a correction statement in such form and confirmed in such manner as may be prescribed, to the prescribed authority within two years from the end of the tax year in which such statement is needed to be delivered under the stated clauses or u/s 200 of the Income-tax Act, 1961.
- Resulting from the above, correction statements for FY 2018-19 (Qtr. 4), FY 2019-20 to 2022-23 (Qtr. 1 to Qtr. 4) and FY 2023-24 (Qtr. 1 to Qtr. 3) will be accepted only up to 31st March 2026. The same are time-barred by limitation on 31.03.2026 and would not be accepted from 01.04.2026 onwards.
- Deductors /Collectors and other Stakeholders consider the same, and they must take critical steps to ensure all corrections for the above period, if any, are performed in time, since filing of the same for the above period is barred by limitation on 31.03.2026.
How Will This Impact Taxpayers?
Every TDS deductor must provide a TDS statement, and sometimes errors occur in the filed TDS returns, which require rectification via a correction statement. Section 200 of the Income Tax Act, 1961, has been superseded by Section 397(3)(f) of the Income Tax Act, 2025.
Under the Income-tax Act, 2025, the allowable time period for revising TDS and TCS statements from April 1, 2026, has been reduced to 2 years from 6 years.
Earlier, the 6-year duration permitted for the amendments sometimes delayed the resolution of tax credit mismatches. Any errors or omissions in TDS/TCS filings in the updated amendment to the TDS pertinent laws should be addressed quickly, which enhances transparency and administrative efficiency.
This amendment also has implications for filing Income Tax Returns, particularly ITR-U, which is available for four years.
Due to the shorter correction window, any instances of incorrect or non-deposit of TDS/TCS identified by the Central Processing Centre (CPC) systems may lead to the issuance of demand notices if the discrepancies are not resolved within the specified time frame. Therefore, both deductors and deductees must be particularly vigilant in ensuring compliance with the updated statutory timelines. This diligence is essential to avoid negative consequences such as delayed refunds, unresolved tax credit issues, or additional tax liabilities.
TDS or TCS deductor or deductee, or collectors should review any tax demands raised for transactions up to December 2023 and begin required corrective actions on or before March 31, 2026.
Read Official Advisory
