Important for Deductees: Why Timely TDS/TCS Corrections Matter
What Changed?
- The section 397(3)(f) of Income Tax Act 2025 has reduced the time limit for deductors (employers, companies, vendors) to correct errors in TDS/TCS statements to 2 years.
- If the deductor does not correct mistakes within this shorter window, the errors may remain permanently uncorrected.
What It Means for You
If your deductor fails to file correction statements in time:
- No Tax Credit in Form 26AS/AIS
- The tax deducted from your salary, professional fees, or vendor payment may not reflect correctly in your income tax records.
- Mismatch in Income Tax Return (ITR)
- During filing, you may see higher tax demand because the deducted tax is not credited to you.
- Delayed or Lost Refunds
- Refund claims may be delayed, reduced, or even rejected if TDS data is missing or incorrect.
- Unnecessary Notices or Scrutiny
- You may get income tax notices asking for clarification or payment, even though tax was deducted from you.
- Stress & Financial Inconvenience
- You may need to follow up with your employer/vendor and spend time resolving disputes.
How to Safeguard Yourself
- Check your Form 26AS and AIS regularly to ensure all TDS/TCS is correctly reflected.
- Inform your deductor immediately if you notice errors.
- Keep proof of TDS deduction (salary slip, invoice, challan, etc.).
- File grievances early through TRACES/Income Tax portal if the issue is not resolved.
Your tax credit depends on your deductor’s timely compliance.
Delays by deductors can directly impact your refunds, tax liability, and peace of mind.
Stay proactive: monitor your tax statements and raise issues quickly.
The Notice can be accessed at: https://incometaxindia.gov.in/Documents/EN-deductee.pdf
