Krishna and Associates — Tax Insights

TDS Compliance How to Resolve TDS Outstanding Defaults After 31st March 2026 By Krishna and Associates  ·  March 2026  ·  TDS, Income Tax, Compliance With the correction window for TDS returns permanently closing on 31st March 2026, many deductors will find themselves with unresolved outstanding defaults for prior financial years. This article explains the only available path forward — how to approach, quantify, and settle these defaults through the Assessing Officer route after the deadline has passed. The Position After 31st March 2026 Once the 31st March 2026 deadline passes, the TRACES portal will no longer accept correction statements for any prior financial year TDS or TCS return. This means defaults that could earlier have been resolved by revising the return — such as wrong PAN, wrong section, or short deduction — can no longer be corrected at the data level. The return stands frozen as last filed. However, the closure of the correction window does not e...

By Krishna and Associates ⚠️ Urgent Alert for All Deductors If you have any pending corrections in your TDS or TCS returns for past financial years, 31st March 2026 is your last and final opportunity to file them. After this date, those returns will be permanently time-barred and no corrections will be accepted — ever. This is not a routine compliance reminder. This is a once-and-final closing window that affects lakhs of deductors, employees, and businesses across India. Legal Background — What Has Changed and Why Earlier Position (Before Finance Act 2024 & Income Tax Act 2025) Under the old framework of the Income Tax Act, 1961 , there was no statutory time limit for filing correction statements for TDS/TCS returns. A deductor could technically correct a TDS return filed 8–10 years ago. While this flexibility was useful for genuine corrections, it also led to: Prolonged reconciliation issues Delayed TDS credits for deductees Misuse of the correction window ...