Final Deadline – 31 March 2026 for Correcting TDS/TCS Returns for FY 2018-19 to FY 2023-24

The Central Board of Direct Taxes (CBDT) has provided an exceptional one-time window allowing all deductors to revise, correct, and regularize TDS/TCS statements for the past six financial years — FY 2018-19 to FY 2023-24. This window closes on 31 March 2026, after which these years will be fully time-barred.

 

1. Scope of the 31-03-2026 Deadline

You are permitted to make corrections to the following financial years only until 31 March 2026:

  • FY 2018-19 (AY 2019-20)
  • FY 2019-20 (AY 2020-21)
  • FY 2020-21 (AY 2021-22)
  • FY 2021-22 (AY 2022-23)
  • FY 2022-23 (AY 2023-24)
  • FY 2023-24 (AY 2024-25)

After 31-03-2026, rectification for these years will not be possible under any mechanism, including:

  • Correction statements
  • PAN corrections
  • Challan corrections
  • Addition/deletion of deductee records
  • Reprocessing requests
  • Adjustments for short deduction, short payment
  • Resolution of interest/late fee mismatch

These years will be frozen for all purposes.

 

2. Impact of New Income-tax Act Effective 01-04-2026

The new Act introduces a much shorter rectification window of only 2 years from the end of the financial year.

Example:

  • For FY 2024-25, corrections allowed only till 31-03-2027.
  • For FY 2025-26, corrections allowed only till 31-03-2028.

This will significantly tighten compliance obligations for all TDS/TCS deductors.

 

3. Consequences of Missing the Deadline

If deductors do not complete corrections before 31-03-2026, the following issues may become permanent:

  1. Outstanding demands on TRACES
  2. Short deduction/short payment entries
  3. Interest accumulation (which cannot be reduced later)
  4. Unmatched challans
  5. PAN errors leading to 20% deduction demands
  6. Late fee under section 234E becoming final
  7. Non-allowance of TDS credit to deductees, leading to disputes
  8. Inability to file compounding or condonation applications for these years

This can create long-term financial, legal, and audit complications.

 

4. Immediate Action Steps for All Deductors

You should plan a comprehensive review of TDS/TCS compliance for the six affected years:

A. Log in to TRACES and review:

  • Default summary
  • Justification reports
  • Outstanding demand details
  • Challan status and unmatched challans
  • Deductee mismatch reports
  • PAN error reports (invalid/incorrect PAN entries)

B. Correct all identified issues:

  • File correction statements
  • Perform challan correction
  • Update PAN details
  • Add omitted deductee entries
  • Rectify incorrect payment codes, section codes, and amounts
  • Clear short payments/late fees/interest

C. Confirm that:

  • All challans are correctly mapped
  • All deductees have received valid credit
  • There are no unresolved defaults
  • Year-wise compliance is complete and documented

 

5. Advisory for Corporates, Tax Professionals, and Government Deductors

  • Conduct an internal compliance audit for FY 2018-19 to 2023-24.
  • Communicate the deadline to branches, franchisees, and regional offices.
  • Maintain a centralized default-tracking sheet.
  • Ensure vendors/employees have correct PAN and updated details.
  • Regularize old cases before statutory limitation permanently closes.

 

Conclusion

31 March 2026 is a non-extendable, final opportunity to clean up TDS/TCS defaults for six previous years. Missing this deadline will lock these years forever, creating unavoidable tax liabilities and future litigation risks.

All deductors are strongly advised to complete the review and correction process at the earliest.