TRACES to Soon Permit Cross-Year Challan Corrections Amid New Income Tax Act Transition:

The Income Tax Department has officially clarified that soon all taxpayers will be allowed to correct challans across Tax Years (TYs) on the TRACES portal, addressing issues arising from payments made under the old Income-tax Act, 1961, instead of the new Income-tax Act, 2025.

The aforementioned clarification has arisen in response to a query raised by a user named Bhagya Singh (@onlytaxthings1) on platform 'X' regarding the availability of the “Challan Correction to FY/TY 2025 & 2026” facility on TRACES. The user explained that he had mistakenly made a tax payment under Assessment Year (AY) 2026-27 instead of Tax Year (TY) 2026-27. Concerning the same, he sought clarification from the Income Tax Department on when the correction facility will be made available.

In its response, the Income Tax Department stated that a challan deposited for Financial Year (FY) 2025-26 can be used while filing the TDS statement for Tax Year (TY) 2026-27. This is permitted because cross-year utilisation of challans is allowed within a range of plus or minus one Tax Year.

The Department further clarified that the facility to correct challans across Tax Years (TYs) is currently under development and is expected to be made available shortly. Once the facility is enabled on the TRACES portal, taxpayers will be able to make the necessary corrections to their challans.

Taxpayers who require further assistance have been advised to share their details, along with their mobile number, at [email protected]. The Department’s team will then contact them for assistance.

The upcoming facility is expected to help taxpayers address challan-related errors during the transition from the Income-tax Act, 1961, to the Income-tax Act, 2025, and simplify the process of filing TDS statements for the relevant Tax Years.

Big TDS Update: You will soom be able to adjust TDS challan of old income income tax act,1961 in TDS return of New Income Tax Act 2025. https://t.co/rH9A72qIFZ

— October 18, 2026