The Income tax Act 2025 has significantly reduced the time limit for filing TDS return correction statements from six years to two years, effective 1 April 2026. As per section 397(3)(f), corrections can now be made only within two years from the end of the relevant tax year. To facilitate transition, authorities have allowed a final window up to 31 March 2026 for correcting older TDS returns. Specifically, correction statements for FY 2018–19 (Q4), FY 2019–20 to 2022–23 (all quarters), and FY 2023–24 (Q1 to Q3) will be accepted only until this deadline. After 31 March 2026, these returns will become time-barred, and no further revisions will be permitted. Failure to update errors within this period may result in permanent loss of TDS credit for taxpayers and potential penalties for deductors. Therefore, timely correction of pending TDS returns is critical to ensure compliance and avoid financial consequences.
Please ensure that all pending TDS return corrections are completed on or before 31 March 2026, as no further revisions will be permitted beyond this date for specified periods.
The Income tax Act 2025, has reduced the period for filling the correction statement. W.e.f. 1.04.2026, the correction is only possible for previous two years (earlier it was 6 years).
As per section 397(3)(f), every person referred to in clause (b) or (e) of the section may correct any discrepancy or update the information furnished, in the statement delivered under the said clauses, by delivering a correction statement in such form and verified in such manner as may be prescribed, to the prescribed authority under the said clauses, within two years from the end of the tax year in which such statement is required to be delivered under the said clauses or under section 200 of the Income-tax Act, 1961 (43 of 1961).
To provide more clarity on the above, the CBDT has issued a statement and clarifies that, Consequent to 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) shall 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.
Hence, After March 31, 2026, no revisions for these periods will be accepted, leading to potential permanent loss of credit for taxpayers and penalties for deductor.
Frequently Asked Questions (FAQs)
Q1. What is the last date to revise specified old TDS returns under the transitional provisions?
Ans. Correction statements for FY 2018–19 (Q4), FY 2019–20 to FY 2022–23 (all quarters), and FY 2023–24 (Q1 to Q3) can be filed only up to 31 March 2026. After this date, these returns will become time-barred and no further corrections will be accepted.
Q2. What change has the Income-tax Act, 2025 made to the time limit for filing TDS correction statements?
Ans. Effective from 1 April 2026, Section 397(3)(f) reduces the time limit for filing TDS correction statements from six years to two years from the end of the relevant tax year in which the statement was required to be delivered.
Q3. Which TDS returns are covered by the final correction window ending on 31 March 2026?
Ans. The final correction window applies to FY 2018–19 (Quarter 4), FY 2019–20 to FY 2022–23 (all four quarters), and FY 2023–24 (Quarters 1 to 3). These correction statements will not be accepted on or after 1 April 2026.
Q4. What could be the consequences of not correcting eligible TDS returns before 31 March 2026?
Ans. Failure to file correction statements within the prescribed time may result in permanent loss of TDS credit for taxpayers and may also expose deductors to penalties, as no further revisions will be permitted for the specified periods after the deadline.
Q5. Why should deductors review their pending TDS correction statements before the deadline?
Ans. Deductors should review and file all pending correction statements before 31 March 2026 to rectify discrepancies, ensure accurate TDS reporting, enable taxpayers to receive correct TDS credit, and comply with the revised limitation period introduced under the Income-tax Act, 2025.
