An important update has emerged for tax deductors handling the transition between financial years. Many deductors mistakenly deposited TDS challans under Financial Year (FY) 2025-26 using the old Income Tax Act 1961, even though the payment belongs to FY 2026-27 under the new Income Tax Act 2025. If you made this mistake, a specific correction mechanism is required to fix it.

The Problem: Portal Mismatch

The new TRACES portal handles compliance for the Income Tax Act 2025. However, this new portal does not yet feature a functional tool for online challan corrections. Attempting to fix the financial year directly on the new platform is currently impossible.

The Solution: Use the Old TRACES Portal

To correct the financial year of your deposited challan, you must log into the legacy platform. The old TRACES portal (operating under the IT Act 1961) still processes these specific OLTAS (Online Tax Accounting System) correction requests.

Step-by-Step Correction Process

1. Log In: Access the old TRACES portal using your deductor credentials.
2. Navigate: Go to the top menu and select Statement / Payment.
3. Select Request: Click on Request for OLTAS Challan Correction from the dropdown.
4. Modify Fields: Locate the specific challan and change the fields:
   Existing FY: 2025-26
   New FY: 2026-27
5. Submit: Confirm the modified details and submit the request.

Key Takeaways

• Do not wait: Do not wait for the new portal to update its features.
• Avoid Defaults: Use the legacy system to avoid late-filing defaults or mismatched TDS certificates.
• Record Keeping: Ensure all tracking IDs are saved after submitting the correction request.