TDS Return Correction – New Rule from 1-4-2026

TDS / TCS Correction Statements – Time Limit Reduced to 2 Years (w.e.f. 01.04.2026)

🔔 What is the New Update?

The Income Tax Department has significantly reduced the time limit for filing TDS/TCS correction statements to 2 years, effective from 1st April 2026.

This amendment changes the long-standing practice where deductors could revise old TDS returns even after several years.

⏳ Earlier vs New Time Limit (Most Important Change)

🔙 Earlier Time Limit (Before 01.04.2026)

• TDS/TCS correction statements were allowed for a much longer period
• Practically, corrections could be filed up to 7 years (or even more in some cases)
• Deductors used to correct:
  • PAN errors
  • Challan mismatches
  • Amount mismatches
  • Late reporting issues
    even after several years

🔜 New Time Limit (From 01.04.2026)

• ⛔ Correction allowed only up to 2 years
• Period counted from:
  • End of the relevant financial year
• No correction possible after 2 years under any circumstances

👉 This is a hard stop, not a procedural delay.

📅 Final Deadline for Past Periods

Correction statements for the following periods will be accepted only up to 31st March 2026:

• Q4 of FY 2018–19
• Q1 to Q4 of FY 2019–20 to 2022–23
• Q1 to Q3 of FY 2023–24

⚠️ From 1st April 2026, corrections for the above periods will be permanently blocked on the portal.

❌ Consequences of Missing the 2-Year Window

If corrections are not filed in time:

• ❌ No rectification allowed after deadline
• ❌ Deductee may lose TDS credit in Form 26AS / AIS
• ❌ Employee / vendor disputes
• ❌ Penalties from ₹10,000 to ₹1,00,000
• ❌ Increased audit exposure and compliance risk
• ❌ Interest and disallowances may arise

✅ Why the Department Introduced This Change

The objective is to ensure:

• Faster reconciliation
• Real-time compliance
• Accurate credit to deductees
• Reduced litigation
• Discipline in TDS reporting

The department is clearly moving towards technology-driven, time-bound compliance.

🧾 Department’s Recommended Best Practices

• Use TRACES utilities & validations
• Monitor defaults and mismatches regularly
• File corrections immediately after detecting errors
• Train staff on reduced correction timelines
• Be proactive, not reactive

Click here to enroll in Practical TDS/TCS Course

📌 Action Points for Deductors & Professionals

✔ Review all pending TDS/TCS corrections immediately
✔ Close old mismatches before 31st March 2026
✔ Strengthen internal controls & review mechanism
✔ Educate clients / staff about the 2-year hard limitTDS / TCS Correction Statements – Time Limit Reduced to 2 Years (w.e.f. 01.04.2026)

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