Traces Advisory on Reduced Time Limit for Revising TDS/TCS Returns
The Income Tax Department has announced an important update on TDS (Tax Deducted at Source) and TCS (Tax Collected at Source). As per the latest advisory, the time limit for filing the correction statements for TDS and TCS returns has been reduced to just two years now, as per the new rules under the Income Tax Act, 2025.
Starting from April 1, 2026, the Income Tax Act, 1961, will be repealed by virtue of Section 536 of the Income Tax Act, 2025. Earlier, under the previous Income Tax Act, 1961, the taxpayers had a window of up to 6 years to file a correction statement. However, according to Section 397(3)(f) of the new law, the time limit has been shortened, and corrections must be made within two years from the end of the tax year in which such a statement is required to be delivered under the said clauses or under Section 200 of the Income-tax Act, 1961.
As a part of these changes, the correction statements for periods such as FY 2018-19 (Qtr. 4), FY 2019-20 to FY 2022-23 (Qtr. 1 to Qtr. 4), and FY 2023-24 (Qtr. 1 to Qtr. 3) must be filed before March 31, 2026. After this date, these correction statements will be considered delayed and will not be accepted.
Therefore, the deductors and collectors are advised to correct any errors or discrepancies in their filings for the above-specified years by March 31, 2026, to avoid any penalty. If corrections are not filed before March 31, 2026, you will not be able to make any changes to your TDS/TCS statements for those periods.
