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[BUSINESS] · India · 2 sources

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Income Tax Department clarifies TDS challan utilization rules

TDS challan Income Tax Department tax year utilization TRACES portal tax correction

The Income Tax Department has clarified that a Tax Deducted at Source (TDS) challan deposited for Financial Year (FY) 2025–26 can be utilized when furnishing a TDS statement for Tax Year (TY) 2026–27. This is possible because cross-year challan utilization is permitted within a range of plus or minus one tax year.

Regarding the ability to correct challans across different tax years on the TRACES portal, the Department stated that a specific correction facility is currently under development and is expected to be available shortly. While TDS/TCS correction statements for TY 2026–27 have already been enabled, the dedicated facility for correcting the underlying tax year recorded on a challan is not yet operational.

Entities

Income Tax Department · TRACES

Sources

TDS Challan Paid for Wrong Tax Year? Income Tax Department Clarifies ±1-Year Utilisation [taxguru.in]
TDS Challan for FY 2025-26 Valid for TY 2026-27 Statement [www.taxscan.in]