A critical deadline is approaching for all TDS/TCS deductors across India. The date of March 31, 2026, will be the final opportunity to revise, correct or close any pending TDS/TCS return issues for six past financial years—FY 2018-19 to FY 2023-24. After this date, the period for making corrections under the old provisions will permanently lapse, rendering these years time-barred with no scope for further rectification.
Under the existing Income-tax Act, the six-year window for revising past TDS/TCS statements continues only up to March 31, 2026. This transitional relief enables deductors to resolve historical mismatches, short deductions, interest liabilities, late-fee demands or challan allocation issues for any of the above financial years. Once the deadline passes, authorities will not entertain any revised statements or correction requests pertaining to those periods.
From April 1, 2026, the new Income-tax Act will restrict the correction period to just two years. This sharp reduction in the permissible window marks a substantial increase in compliance obligations, making timely reconciliations essential to avoid disputes and future financial exposure.
In anticipation of the deadline, tax professionals and offices have already begun reviewing the TRACES profiles of all TAN holders. They are conducting detailed checks on outstanding demands, including late payment interest, late filing fees, short payment, short deduction and challan-to-statement mismatches. Another important step involves verifying available balances in old challans. Under current TRACES rules, challans may be adjusted for one year before and one year after the financial year for which a demand has been raised. This flexibility allows many old discrepancies to be settled without additional payments.
A recurring issue identified during reviews is that deductors may have paid interest on delayed TDS deposits, but the interest component was not correctly utilised or mapped while filing the TDS return. This results in avoidable demands appearing on the TRACES portal. Correcting such cases requires proper mapping of challans and revisiting return–challan allocations.
Failure to complete all corrections and close demands before March 31, 2026, could result in long-term compliance complications. These include permanent unrectifiable demands, accumulated interest, hurdles in claiming refunds, challenges during scrutiny or TDS surveys and potential legal consequences in serious cases. Tax experts caution that deductors must take advantage of the remaining time to ensure complete reconciliation.
A combined timeline for FY 2018-19 to FY 2025-26 is being circulated among practitioners to assist deductors in understanding which years remain open for correction and how the transition to the new two-year window will operate from April 2026.
The shift to a shorter correction period under the new Income-tax Act underscores the need for proactive compliance. Every TAN holder is advised to immediately begin reviewing their statements, challans, demands and TRACES dashboard to ensure all discrepancies are resolved well before the deadline.
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