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Paid a 2026-27 TDS challan under the old Act (1961)? How to fix it before you file the Q2 return

Last updated 11 Oct 2026 · India

Short answer. TDS on any sum paid or credited on or after 1 April 2026 falls under the Income-tax Act, 2025, and its challan should be for Tax Year 2026-27 (incometax.gov.in FAQ). If you deposited it under the 1961 Act by mistake, the challan will not sit with your 2026-27 statement, and your deductee may not get the credit. TDS challans are corrected on TRACES (tdscpc.gov.in) with “Request for OLTAS Challan Correction”, not on the e-filing portal. Do it now: the Q2 (Jul–Sep) statement is due 31 October 2026, and correction requests need processing time.

Why this happens, and why it matters

During the transition year both Acts run side by side. When you create a TDS challan in your TAN login you choose the Act: the department's manual says to pick Income Tax Act 1961 only for periods up to AY 2026-27 (including tax deducted in March 2026), and Income Tax Act 2025 for Tax Year 2026-27 onwards. Picking the wrong button is easy, and the challan then carries the old year. The department's own FAQ asks taxpayers to select the right year "so that tax credit is granted in correct year".

The quarterly statement links each deductee's TDS to a challan. If the challan is under the other Act or year, it does not match, the deductee's credit can go missing from their tax credit statement, and you may see a short-payment default. Accountants on public forums have reported exactly this in July 2026: one April challan under the 1961 Act and the rest under the 2025 Act, so the challan file (CSI) for the new statement did not contain it.

Which Act is right? A quick test

Date the payment or credit to the payee happenedAct and year for the challan
On or before 31 March 2026 (even if you deposit the TDS in April 2026)Income-tax Act 1961, AY 2026-27 (FY 2025-26)
On or after 1 April 2026Income-tax Act 2025, Tax Year 2026-27

Source: incometax.gov.in Tax Payments FAQ, Q9 and Q22. If your challan matches this table, nothing needs fixing.

How the TRACES correction works (official tutorial)

  1. Log in to TRACES (tdscpc.gov.in) as the deductor with your TAN.
  2. Go to Statements / Payments → Request for OLTAS Challan Correction.
  3. Choose the field to correct. The tutorial lists Financial Year, Minor Head (200/400), Major Head (20/21) and Section Code (not section 195, which needs the Assessing Officer).
  4. Enter the challan's CIN details (BSR code, deposit date, serial number) and amount. The challan must be unclaimed or matched.
  5. Change the year, check the summary, submit and confirm. You get a Request ID and an email.
  6. Track it: "Submitted to ITD", then "Processed", "Rejected" (reason in Remarks) or "Failed" (submit again).

The tutorial notes the year can be moved only up to the financial year of the deposit date. A challan deposited in, say, May 2026 can be moved to 2026-27; a challan deposited in March 2026 cannot.

What we could not confirm from an official source

As of 11 Oct 2026 we found no CBDT or TRACES notice that describes moving a challan from the 1961 Act to the 2025 Act. News reports (Economic Times, ET Now, JurisHour, mid-2026) quote practitioners saying the new TRACES for the 2025 Act does not yet offer challan correction, and that the fix is the old TRACES OLTAS correction, changing FY 2025-26 to 2026-27. We have not been able to test this ourselves. If the option does not appear or is rejected, raise a grievance on TRACES and contact your jurisdictional TDS Assessing Officer with the challan copy, and tell your CA before you file.

Common mistakes

Checklist before you file the Q2 statement

Frequently asked questions

Which Act applies to TDS on a payment made in April 2026?

The Income-tax Act, 2025. TDS on any sum paid or credited on or after 1 April 2026 is governed by the 2025 Act, so the challan should be for Tax Year 2026-27.

I deducted TDS in March 2026 and deposited it in April 2026. Which challan?

The 1961 Act challan. The incometax.gov.in FAQ says the old challan applies when the payment or credit to the payee was on or before 31 March 2026, even if the deposit is made after 1 April 2026.

Where do I correct a TDS challan paid under the wrong year?

On TRACES (tdscpc.gov.in), through Statements / Payments, Request for OLTAS Challan Correction. The e-filing portal's Challan Correction service does not cover TDS challans with minor head 200.

Does the new TRACES for the 2025 Act support challan correction?

As of 11 October 2026 we found no official notice either way. News reports quote practitioners saying it does not yet, and that the old TRACES OLTAS correction is used to change FY 2025-26 to 2026-27. Confirm with TRACES or your CA.

What if the correction request is rejected?

Read the reason in the Remarks column under Track OLTAS Challan Correction, raise a grievance on TRACES, and contact your jurisdictional TDS Assessing Officer with a copy of the challan.

Official sources

Not tax or legal advice. Portal options during the 1961-to-2025 transition are changing; check TRACES and the e-filing portal, and confirm your case with your CA before you file. Last checked 11 Oct 2026.

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