The Income Tax Department has issued an advisory stating that correction statements for TDS and TCS can only be filed for Q4 of FY 2018-19 up to Q3 of FY 2023-24 until March 31, 2026. This means if your employer, bank, property buyer, or any other deductor has deposited the correct TDS but reported incorrect details in the challan, you must request a correction before March 31, 2026. Beyond this date, the TDS credit will lapse, forcing you to pay tax again.
If you fail to clear the liability, the department may issue you a tax notice.
What’s the update on TDS correction?
According to the advisory, the Income Tax Act, 1961, will stand repealed from April 1, 2026, under Section 536 of the Income Tax Act, 2025. Further, Section 397(3)(f) of the 2025 Act states that a deductor or collector may file a correction statement in the prescribed form within two years from the end of the tax year in which the original statement was required under earlier provisions, including Section 200 of the 1961 Act.
As a result, correction statements for FY 2018-19 (Q4), FY 2019-20 through FY 2022-23 (all quarters), and FY 2023-24 (up to Q3) will only be accepted until March 31, 2026. After this deadline, filings will be barred. The advisory urges all deductors, collectors, and stakeholders to complete any pending corrections before the limitation period closes on March 31, 2026.
Tax experts note that every deductor of TDS must file a TDS statement, but errors often occur and must be rectified by submitting a correction statement. Section 200 of the Income Tax Act, 1961, has now been replaced with Section 397(3)(f) of the 2025 Act, altering the permissible correction timelines.
Effective April 1, 2026, the window for revising TDS and TCS statements will shrink from six years to two years under the new law. Earlier, the six-year period enabled long-delayed retrospective changes, which often postponed resolution of tax credit mismatches. The new two-year framework compels quicker rectification, improving efficiency and transparency. This legal shift also affects Income Tax Return filings, particularly ITR-U, which continues to remain available for four years.
Deductors, deductees, and collectors must carefully review any outstanding demands related to transactions up to December 2023 and ensure corrective action is taken no later than March 31, 2026.
TDS/TCS correction procedure
TDS and TCS returns must be accurate, but if errors occur, correction statements can be filed. The process involves six steps:
Step 1: Log in to TRACES (www.tdscpc.gov.in) and download the Consolidated TDS/TCS file.
Step 2: Import the consolidated file and prepare the correction statement as per the relevant category.
Step 3: Include only records needing corrections.
Step 4: Enter provisional receipt numbers of both regular and earlier correction statements.
Step 5: Validate the correction statement using the File Validation Utility (FVU).
Step 6: Upload the validated (.fvu) correction statement through a TIN-FC or directly on the NSDL website (www.tin-nsdl.com