The Income Tax Department has clarified that TDS challans deposited for FY 2025-26 can be utilised for the tax year 2026-27. A correction facility is under development and will be available shortly.
The Income Tax Department has issued a clarification stating that Tax Deducted at Source (TDS) challans deposited for the financial year 2025-26 may be used for the tax year (TY) 2026-27. This administrative relaxation aims to address potential mismatches in tax credit entries arising from system or procedural delays.
According to the department, a dedicated correction facility is currently under development and is expected to be rolled out shortly. Until then, taxpayers and deductors are advised to retain proper documentation supporting the timing and allocation of TDS deposits. The clarification ensures continuity in tax accounting and prevents undue hardship in filing timely returns.
Implication for practitioners: Tax professionals should monitor the rollout of the correction mechanism and advise clients to reconcile TDS credits carefully. The update is particularly relevant for businesses with year-end transactions and those managing TDS compliance across fiscal transitions.
