Tax Alert: TRACES Portal Sets 2-Year Limit for TDS/TCS Corrections

A big change has come from the Income Tax Department’s TRACES portal—and it affects everyone who handles TDS or TCS. If you’re a deductor, collector, or taxpayer, here’s what you need to know in simple terms.

What’s Changed?

Earlier, you could file correction statements for TDS/TCS even after many years. Now, that window has been reduced to just 2 years.

• New Rule: You can only file a correction within 2 years from the end of the financial year in which the original statement was filed.
• Why It Matters: This change is meant to fix errors faster and make tax records more accurate.

Important Deadline: March 31, 2026

To help with the transition, the department has given a final deadline:

• You can file corrections for FY 2018-19 (Q4) to FY 2023-24 (Q3) only till March 31, 2026.
• After this date, corrections for these years will be permanently closed on the TRACES portal.

What This Means for You

For Deductors/Collectors:

• You must fix any pending errors or mismatches before the deadline.
• If you don’t, the demands will stay unresolved, and you may face penalties or compliance issues.

For Taxpayers (Deductees):

• If your Form 26AS shows missing or wrong TDS/TCS, ask your deductor to correct it now.
• After March 31, 2026, they won’t be able to make changes—and you could lose that tax credit forever.

What You Should Do Now

Here’s a simple action plan:

1. Log in to TRACES: Use your TAN credentials.
2. Check for Errors: Go to the “Defaults” or “Demands” tab and download the Justification Report.
3. Fix Key Issues: Look for PAN mismatches, wrong challan details, or short deductions.
4. File Corrections: Use the online or offline method (via RPU) and submit corrections well before the deadline.

Final Tip

This new rule is all about faster and cleaner tax compliance. Don’t wait till the last minute—fix your TDS/TCS issues now and help your deductees claim their rightful tax credit.

Stay alert. Stay compliant. And make sure your records are clean before March 2026!

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