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Effect of Amendment on Time Limit for revising TDS Returns
The July Budget 2024 introduced a six-year time limit for revising TDS returns. Budget 2024 amendment introduced a six-year time limit for revising TDS returns, which was added under Section 200(3) of the Income Tax Act, Previously, no time limit existed for filing TDS correction statements, allowing unlimited revisions.
Effect of Budget 2024 Amendment
- March 31, 2025, Deadline for Old TDS Corrections: For financial years 2007-08 to 2018-19, the final date to correct TDS returns is March 31, 2025. Post this deadline, no further corrections can be made.
- Loss of TDS Credit if Not Corrected: If the TDS return had errors (e.g., wrong PAN, incorrect details), then TDS credits will not reflect in Form 26AS or AIS. This means taxpayers will permanently lose their right to claim TDS for these years.
- Cut-off for FY 2007-08 to 2018-19: Action Required from taxpayer: With the new amendment, the deadline for correcting TDS returns for financial years 2007-08 to 2018-19 is March 31, 2025. After this date:
- Deductors will no longer be able to rectify errors in old TDS returns.
- Taxpayers may lose their right to claim TDS credits for these years.
- Risk of Double Taxation: If a taxpayer cannot claim TDS credit, they may need to pay tax again while filing their ITR. This could result in double taxation—where tax is deducted but not credited to the taxpayer.
- Permanent Loss of TDS Credit: If a deductor filed the TDS return incorrectly (e.g., incorrect PAN, wrong details, etc.), then Key Takeaways for Income tax Taxpayers:
- The TDS credit will not reflect in the taxpayer’s Form 26AS or AIS. So Check Form 26AS and AIS Regularly – Ensure that all TDS credits are properly reflected.
- Without this credit, the taxpayer cannot claim the deducted tax while filing their Income Tax Return (ITR). So Follow Up with Deductors – If there is a missing TDS entry, request the deductor (bank, employer, or others) to file a revised TDS return with the correct details.
- If corrections are not made before the deadline, the taxpayer will permanently lose the TDS amount deducted on their behalf.
- File a Grievance if Deductor Does Not Act – If the deductor refuses to revise the return, file a grievance with the Income Tax Department through the e-filing portal. And Any pending corrections for FY 2007-08 to FY 2018-19 must be made before March 31, 2025; after this, no revisions will be allowed.
- Monitor Section 245 Notices : If you receive a notice adjusting your refund against an old tax demand, check if it is due to missing TDS credit and take action accordingly.
In summary:
The introduction of a time limit for filing revised TDS returns in the July Budget 2024 is significant. Deductors can now revise their TDS returns only up to 6 Years from the end of the financial year in which the return was filed. This means that corrections for FY 2007-08 to FY 2018-19 must be completed by March 31, 2025.
- TDS Deductors should review and correct any old TDS return errors before March 31, 2025. And taxpayers should check their Form 26AS/AIS to ensure all TDS credits are reflected correctly.
- If TDS credit is not available, taxpayers will need to pay tax again when filing their ITR. This results in double taxation, where tax is deducted but not credited to the taxpayer’s account.
- Income tax taxpayers must proactively review past tax filings and address discrepancies before the deadline.
