The Income Tax Act, 1961 will stand repealed with effect from April 1, 2026, by virtue of Section 536 of the Income Tax Act, 2025. The transition marks a significant shift in India's taxation framework as the new Income Tax Act, 2025, comes into full effect.
As part of this change, the government has issued clarity on the filing of correction statements for past financial years.
Key Provisions
1. Deadline for Correction Statements
Under Section 397(3)(f) of the Income Tax Act, 2025, deductors/collectors are permitted to file correction statements in prescribed form and manner within two years from the end of the tax year.
Accordingly, correction statements for the following periods will be accepted only up to March 31, 2026:
- FY 2018-19 (Q4)
- FY 2019-20 to FY 2022-23 (all quarters)
- FY 2023-24 (Q1 to Q3)
2. Bar on Filing After Deadline
- From April 1, 2026, no correction statements for the above financial years will be accepted, as they will be barred by limitation.
3. Advisory for Stakeholders
- Deductors, collectors, and other stakeholders have been advised to complete all pending corrections well before the cut-off date to avoid compliance issues.
Industry Impact
The repeal of the Income Tax Act, 1961, and the transition to the new Income Tax Act, 2025, is a landmark reform in India's direct taxation system. While the shift aims to simplify compliance and align taxation with contemporary needs, businesses and tax deductors must act promptly to update their records.
The March 31, 2026 deadline serves as the final opportunity to rectify errors in TDS/TCS filings for the specified years, ensuring a smooth transition into the new tax regime.
Official copy of the notification has been attached
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