Final Deadline for TDS/TCS Corrections – Act Before 31-03-2026

1️⃣ What Is the Current Position?

As per the existing provisions under the Income-tax Act, 1961, deductors are allowed to file correction statements for earlier financial years within prescribed time limits.

Currently, corrections relating to FY 2018-19 to FY 2023-24 can be made only up to 31-03-2026.

After this date:

a) These six financial years will become time-barred

b) No further correction statements will be permitted

c) Demands raised due to mismatches may become irreversible

2️⃣ What Changes From 01-04-2026?

With the implementation of the new Income-tax framework, the window for corrections will be substantially reduced.

➡️ Correction statements will generally be permitted for only two financial years
➡️ Older years will automatically fall outside the permissible time limit

This is a major shift from the existing regime and requires immediate compliance review.

3️⃣ Why This Deadline Is Critical

Many businesses still face issues such as:

a) Short deduction or short collection

b) Wrong PAN reporting

c) Incorrect challan mapping

d) Section code errors

e) Late filing defaults

f) Mismatch between Form 26AS and TDS returns

g) Outstanding TRACES demands

If not corrected within time:

a) Demands may crystallize permanently

b) Interest under Section 201(1A) may continue

c) Penalty proceedings may be initiated

d) Litigation exposure may increase

4️⃣  Practical Action Plan for Deductors

Here is a structured approach to mitigate risk:

✔ Step 1: Conduct a Comprehensive TDS/TCS Reconciliation

a) Reconcile books vs. TDS returns

b) Match challans with OLTAS

c) Verify Form 26AS/TRACES data

✔  Step 2: Identify Years with Defaults

Focus especially on:

a) FY 2018-19

b) FY 2019-20

c) FY 2020-21

d) FY 2021-22

e) FY 2022-23

f) FY 2023-24

✔  Step 3: File Correction Statements

Rectify:

a) PAN errors

b) Deduction amounts

c) Section codes

d) Challan tagging

✔ Step 4: Clear Outstanding Demands

Where liability is genuine, clear dues promptly to avoid future recovery complications.

Where liability is genuine, clear dues promptly to avoid future recovery 
complications.
5️⃣ Consequences of Inaction

Ignoring this deadline may result in:

❌  Permanent loss of rectification opportunity
❌   Increased litigation cost
❌   Difficulty in closing assessments
❌  Audit qualifications
❌   Compliance risk for directors and key managerial personnel

6️⃣ Strategic Compliance Advisory

This is not merely a technical filing issue — it is a risk management exercise.

Organizations should treat this as:

A compliance audit project

A litigation prevention measure

A governance strengthening initiative

🔔 Final Takeaway

⏰  31 March 2026 is not just another deadline — it is a compliance cut-off point.

Proactive correction today can prevent irreversible tax disputes tomorrow.

Businesses, CFOs, tax professionals, and finance teams must act immediately to review and regularize historical TDS/TCS filings.