Correct Your TDS/TCS Statement Before This Date to Avoid Losing Tax Credit

The Income Tax Department, in an advisory, informed that the taxpayers can correct the TDS and TCS statements for Q4 of FY 2018-19 to Q3 of FY 2023-24 before March 31, 2026. Once this deadline expires, you will not be allowed to make any corrections in your TCS or TDS statement, losing your TDS credit. Therefore, if your deductor, like a bank or employer, has deducted incorrect TDS or has submitted incorrect details in the challan, then you must ask for a rectification before March 31, 2026, to avoid paying the tax again.

The deductor in the case of TDS must submit a TDS statement, and often, there are mistakes in the TDS Returns, which require correction. The Income Tax Department in the official advisory highlighted that the Income Tax Act, 1961, is no longer effective from April 1, 2026. The Income Tax Department has urged the taxpayers to rectify any error or mistake in the TDS or TCS statement 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) before March 31, 2026. From April 1, 2026, the correction will not be accepted. It advised the deductors and collectors to take the required steps for the correction within the prescribed deadline.

The Income Tax Act, 1961, is being replaced with the Income Tax Act, 2025, from April 1, 2026. Under the new Act, the time period for revising the TDS and TCS statement has been reduced to two years, from six years.

If TCS/TDS mistakes are not corrected quickly within the reduced timeline, the CPC may send demand notices. Therefore, it is important for both the deductee and the deductor to be more careful to ensure timely and correct compliance. Failing to could lead to delayed refunds, tax credit problems, or extra tax demands.

Therefore, the deductors, deductees, and collectors are advised to check any tax demands related to transactions up to December 2023 and fix errors, if any, before March 31, 2026, to avoid problems later.