As the March 31, 2025, deadline approaches, it is imperative for taxpayers and deductors to review and rectify any pending TDS corrections. The Finance (No. 2) Act, 2024, has introduced a strict time limit for submitting correction statements under Section 200(3) and Section 206C(3B) of the Income-tax Act.
Key Deadline and Implications
March 31, 2025, is the final date for filing TDS correction statements for financial years 2007-08 to 2018-19.
This deadline applies to all unresolved TDS mismatches, including discrepancies due to incorrect demands, Aadhaar/PAN validation errors, inoperative PAN, and data inconsistencies in the TDS portal.
All demand cancellations for mismatches, invalid PAN, inoperative PAN, or any other correction must be completed before this deadline.
Post this date, no further corrections will be accepted for these years, and all future corrections will be subject to the new six-year limitation period introduced by the Finance (No. 2) Act, 2024.
Any pending corrections left unfiled will require separate appeals for each quarter and each financial year, covering all types of TDS returns, including Form 24Q (Salary TDS), Form 26Q (Non-Salary TDS), and Form 27Q (Non-Resident TDS).
Deductees can pressurize deductors if TDS has been deducted but is not reflecting in Form 26AS, leading to potential disputes and compliance burdens.
Action Plan for Deductors and Taxpayers
Conduct an immediate review of past TDS filings and identify any errors requiring correction.
Ensure all correction statements are filed before the deadline to avoid compliance risks.
Address any Form 26AS mismatches, as unresolved issues could impact tax credits and create financial liabilities.
Clarification from CBDT: No Extensions Will Be Granted
The Central Board of Direct Taxes (CBDT) has confirmed that the March 31, 2025, deadline is final.
Businesses and individuals must proactively complete their TDS corrections to prevent compliance challenges.
Final Reminder: Act Now to Avoid Future Liabilities
The Finance (No. 2) Act, 2024, has set an unambiguous cut-off for TDS corrections. From April 1, 2025, corrections will only be allowed within six years from the end of the financial year in which the original statement was filed. Failing to comply before March 31, 2025, may lead to permanent tax credit losses and regulatory complications. Failure to rectify errors now will necessitate individual appeals for each period and return type, creating significant compliance burdens. Ensure all necessary corrections are made immediately to remain compliant and avoid penalties
