Wrong Payment Code or Tax Year on a TDS Challan? How to Correct It in the First Year of the New Act

The first year of the Income Tax Act, 2025 changed the identifiers on almost every TDS challan. Section references became 4-digit payment codes. ITNS 281 became ITNS 281N, with a section-wise table that can carry many codes. The assessment year gave way to the tax year. Each change created a new way to make a mistake that is perfectly valid on the challan and wrong for the return.

The good news is that a wrong challan is usually fixable. The important thing is to know which route applies to which field, because the routes and their conditions differ.

First, find out what actually went wrong

• Wrong payment code — for example, the code for payments to companies used where the payee was an individual, or a professional-fee code used for a technical-service payment.
• Wrong tax year or financial year — common where a payment for a 2025-26 deduction was made after 1 April 2026, or the reverse.
• Wrong minor head — the deductor-payable code (200) and the regular-assessment code (400) mixed up. A challan under 400 is not available for the TDS statement.
• Wrong major head — a company and non-company code mixed up.
• Wrong TAN or PAN — the payment credited to a different deductor.
• Wrong amount split — the right total, but the wrong breakdown between tax, interest and fee.

Which route fixes which error

The TRACES route, step by step

1. Log in to TRACES as the deductor and open the request for OLTAS challan correction under the statements and payments menu.
2. Enter the challan identifiers: BSR code, date of deposit, challan serial number and amount.
3. Enter the corrected values for the fields you are changing and submit. Note the request number.
4. Track the request until it is processed, then check that the corrected challan shows correctly before you consume it in a statement.

TRACES accepts a correction only when certain conditions hold. Typically the challan must be matched and not yet claimed in a statement, no refund should have been requested against it, the AO should not have used it to settle interest or fees, and no other correction request should be pending on it. If the challan is already consumed in a filed statement, you may need to file a correction statement as well as correct the challan.

The AO route

For TAN or PAN errors and other fields outside the TRACES list, write to the jurisdictional Assessing Officer. Include the challan's CIN (BSR code, date of deposit and serial number), the amount, the counterfoil or the e-payment receipt, the field to be changed and the correct value, with evidence. Some corrections through the bank or AO have short time windows from the deposit date, so do not let a known error wait until the quarter's statement is due.

Catching errors before they need correcting

Almost every correction request starts with a challan nobody looked at closely when it was paid. A monthly review is cheap: list every challan paid in the month with its codes and amounts, and compare each code with the deduction it was meant to cover. A wrong code found in the same month is a quick TRACES request. Found at Q4, it is an afternoon of correspondence.