Archives November 2026

Deductors may sometimes make the mistake of paying TDS or TCS through a challan under the wrong Assessment Year or Tax Year. This can create discrepancies between the challan, the TDS statement and the tax credit reflected in the deductee’s account.

To address such situations, the Income Tax Department has clarified the availability of cross-tax-year challan utilisation within a range of plus or minus one year, subject to the applicable portal validations and available challan balance.

This clarification is particularly relevant for employers, businesses and finance teams dealing with TDS compliance during the transition from the Income-tax Act, 1961 to the Income-tax Act, 2025.

Clarification on Cross-Tax-Year Challan Utilisation

The Department’s clarification addresses the utilisation of eligible challans across adjacent Tax Years within a range of ±1 year.

For example, a challan deposited for FY 2025–26 may be utilised while filing a TDS statement for Tax Year 2026–27, subject to the applicable validation and availability of balance.

Similarly, eligible challans from a later year may be considered for an earlier adjacent year, subject to the relevant TRACES validation and available balance.

However, this facility does not mean that a challan can be utilised for any financial year or tax year. The utilisation is restricted by the applicable year-range validation and other conditions prescribed by the portal.

Challan Tagging vs Changing the Tax Year

It is important to understand the difference between cross-year challan utilisation and correction of the tax year recorded in the challan.

• Challan utilisation or tagging: This refers to using an already-paid challan with an available balance while filing a TDS statement for an eligible adjacent year. The original tax year recorded in the challan does not change merely because the challan is tagged to another year’s statement.
• Changing the challan’s tax year: This refers to formally correcting the Assessment Year or Tax Year recorded at the time of challan payment. It is a separate process and should not be confused with cross-year utilisation.

The Income Tax e-filing portal provides a challan correction facility for specified tax payments, including correction of Assessment Year or Tax Year within seven days of payment. However, this facility does not generally cover TDS and TCS challans.

For TDS/TCS challan-related corrections, the deductor may need to follow the applicable correction procedure through TRACES or approach the Jurisdictional Assessing Officer, depending on the nature of the correction.

The Department’s October 2026 clarification also indicated that a separate cross-tax-year challan correction facility was under development. Deductors should check the latest TRACES or Income Tax Department updates before relying on such a facility.

Who Is This Clarification Relevant For?

The clarification is particularly relevant for:

1. Employers depositing TDS on salaries.
2. Businesses deducting TDS on contracts, professional fees, rent and other payments.
3. Collectors depositing TCS.
4. Finance teams reconciling challans, TDS statements and tax credits.
5. Chartered accountants and tax professionals handling TDS/TCS compliance and corrections.

It is especially useful where a deductor has inadvertently selected an incorrect year while depositing a challan, but the actual tax deduction relates to an adjacent year.

What Should Deductors Verify Before Utilising Challans Across Years?

Before tagging a challan to a TDS statement for an adjacent year, deductors should verify the following:

• The challan has an available balance after considering earlier utilisation.
• The challan year and the statement year fall within the permitted ±1-year range.
• The correct TDS/TCS statement form, quarter and Tax Year have been selected.
• The PAN, section or payment code and amount of deduction are correctly reported.
• The challan has not already been fully utilised in another statement.
• The challan details and payment records are properly reconciled.
• Supporting documents, bank payment proof and reconciliation workings are retained for future reference.

Deductors should also remember that cross-year utilisation does not itself change the original year recorded in the challan. If the challan details require formal correction, the applicable correction procedure should be followed separately.

Conclusion

The clarification on ±1-year challan utilisation provides relief to deductors who have inadvertently deposited TDS or TCS challans under an incorrect year, particularly during the transition to the new Tax Year system.

However, cross-year utilisation and formal challan correction are two different processes. Eligible challans may be tagged to statements for an adjacent year, subject to available balance and portal validation, but this does not automatically correct the original tax year recorded in the challan.

Deductors should reconcile their challans regularly, verify the applicable year-range conditions and initiate formal corrections wherever necessary to avoid TDS/TCS reporting and tax-credit mismatches.

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Disclaimer: This article is for general informational purposes only and should not be treated as legal or tax advice. The applicable law, forms, filing procedures, and correction requirements should be verified against the latest official instructions for the specific transaction and reporting period.

A taxpayer aggrieved by an order passed in GST proceedings may file an appeal before the Appellate Authority under Section 107 of the Central Goods and Services Tax (CGST) Act, 2017. However, payment of the prescribed pre-deposit is a statutory condition for filing the appeal.

Appeals may face defects or delays when taxpayers incorrectly calculate the amount payable or confuse the amount admitted with the disputed tax.

The pre-deposit is not an additional tax. It is a statutory requirement for an appeal under Section 107. The amount payable depends on the amount admitted by the taxpayer and the amount of tax disputed in the impugned order.

What Should Be Deposited?

Under Section 107(6), an appellant is generally required to pay:

1. The full amount admitted: The entire amount of tax, interest, fine, fee and penalty arising from the impugned order that is admitted by the appellant.
2. The disputed-tax pre-deposit: In addition to the admitted amount, 10% of the remaining disputed tax is payable, subject to the applicable statutory cap.

The 10% pre-deposit applies to the disputed tax, not to disputed interest, fine, fee or penalty. The appellant should carefully examine the impugned order and identify which amounts are admitted and which are disputed.

For appeals under Section 107, the maximum pre-deposit is generally capped at ₹20 crore in relation to the relevant tax component. The applicable cap should be checked against the type of tax involved and the law in force when the appeal is filed.

Example of Pre-Deposit Calculation

Suppose an order demands:

• GST: ₹5,00,000
• Interest: ₹50,000
• Penalty: ₹50,000

The taxpayer admits ₹1,00,000 of the GST and disputes the remaining ₹4,00,000. The taxpayer also admits the interest and penalty amounts.

Particulars	Amount
Admitted GST	₹1,00,000
Admitted interest	₹50,000
Admitted penalty	₹50,000
10% of disputed GST of ₹4,00,000	₹40,000
Total amount payable for the appeal	₹2,40,000

This calculation assumes that the stated admitted amounts are payable under the impugned order and that the statutory cap does not reduce the disputed-tax pre-deposit.

Time Limit and Filing Route

An appeal under Section 107 is generally required to be filed within three months from the date of communication of the order. The Appellate Authority may condone a further delay of up to one month if sufficient cause is shown.

The appeal is filed electronically in Form GST APL-01 on the GST portal, along with the relevant documents. A provisional acknowledgment is generated after electronic filing.

Under Rule 108 of the CGST Rules, a certified copy of the decision or order appealed against is required to be submitted within seven days of filing the appeal. Where the certified copy is submitted within this period, the date of filing is treated as the date of the provisional acknowledgment. If it is submitted after seven days, the date of filing is treated as the date of submission of the certified copy. The applicable portal and submission requirements should therefore be checked carefully.

The appellant should ensure that the required payment is made and the relevant debit is properly reflected in the prescribed ledger before filing the appeal. The taxpayer should retain the payment challan, electronic-ledger entries and debit proof, along with the appeal acknowledgment and supporting documents.

Common Errors to Avoid

Taxpayers should avoid the following mistakes while calculating or filing a pre-deposit:

• Treating the entire demand as admitted tax and paying more than required.
• Applying 10% to disputed interest, penalty, fine or fee instead of the disputed tax.
• Ignoring interest, penalty or fee admitted under the impugned order.
• Using an outdated statutory cap while calculating the disputed-tax pre-deposit.
• Filing the appeal after three months without properly documenting the grounds for seeking condonation of delay.
• Failing to ensure that the required payment and debit are reflected at the time of filing.
• Not uploading the impugned order, payment details and supporting documents as required.
• Missing the seven-day requirement for submitting the certified copy of the order.
• Confusing an appeal under Section 107 with a revision application or another statutory remedy.

Conclusion

The pre-deposit under Section 107 has two principal components: the admitted amounts payable in full and 10% of the disputed tax, subject to the applicable statutory cap. Correctly classifying admitted and disputed amounts can help prevent filing defects and unnecessary cash outflow.

Taxpayers should verify the applicable law and portal requirements, preserve payment records, file within the prescribed time and support the appeal with complete documentation.

How TaxAcumen Can Help

TaxAcumen provides clear, practical insights on taxation, GST, company law and business compliance. Stay informed with our latest updates to make timely and well-informed decisions. Contact TaxAcumen for professional consultation and assistance with GST compliance and appeal-related matters.

Disclaimer: The information provided in this article is for general informational and educational purposes only and does not constitute tax, legal, financial, investment, accounting, or other professional advice. Laws, regulations, tax provisions, and financial information are subject to change and may vary based on individual circumstances. While every effort has been made to provide accurate and up-to-date information, readers should verify the applicable provisions and consult a qualified professional before making any decision or taking any action based on this content. TaxAcumen is not responsible for any loss or consequence arising from reliance on the information provided.

A Digital Signature Certificate (DSC) enables authorised signatories to digitally sign GST applications, returns, refund claims and other eligible documents on the GST Portal. However, taxpayers may encounter errors during the registration or filing process if the DSC token, emSigner utility or system configuration is not properly set up.

A DSC registered on the GST Portal is associated with the authorised signatory of the relevant GST profile. The authorised signatory can use the registered DSC for eligible filings, subject to certificate validation and the applicable requirements of the GST Portal.

Before You Begin

Keep the following items ready before starting the registration process:

1. A valid DSC issued by a licensed Certifying Authority.
2. The DSC USB token or dongle.
3. The appropriate token driver installed on your computer.
4. The emSigner utility downloaded and installed from the GST Portal.
5. GST Portal login credentials of the taxpayer.
6. The authorised signatory’s details correctly updated in the GST registration profile.

Important: emSigner Version 3.3

As per the GSTN advisory dated 19 September 2026, emSigner version 3.3 is required for newly issued DSC USB tokens from 21 September 2026 onwards.

Existing users whose DSC certificates and tokens are valid and working normally may continue using their current emSigner version. However, they may upgrade to version 3.3 if they experience signing failures or if the certificate is not detected despite correct installation of the token drivers.

Version 3.3 is stated to be backward compatible with existing tokens. Users receiving new tokens should also check the system requirements specified in the GSTN advisory, including the requirement for Java 1.8.

The DSC should be valid and the token should be connected to the computer before beginning the registration process. The emSigner service should be running, with administrator permissions wherever required.

Steps to Register a DSC on the GST Portal

Taxpayers can follow these steps to register their DSC:

1. Visit the GST Portal and log in using the taxpayer’s username and password.
2. Navigate to My Profile.
3. Select Register/Update DSC.
4. The portal will display the Register Digital Signature Certificate page.
5. If emSigner is not installed, download the appropriate utility from the GST Portal’s DSC/emSigner help section.
6. Install the utility and run emSigner with administrator permissions.
7. Connect the DSC USB token to the computer.
8. Return to the Register/Update DSC page.
9. Select the relevant authorised signatory from the drop-down list.
10. Select the digital certificate detected by the emSigner utility.
11. Enter the DSC token PIN or password when prompted.
12. Click Sign to complete the registration process.

After successful registration, the DSC will be associated with the selected authorised signatory on the GST profile. Retain the registration confirmation or acknowledgment, if generated, for future reference.

When Should You Update a DSC on the GST Portal?

A taxpayer may need to register or update a DSC in the following circumstances:

• The existing DSC has expired.
• A renewed DSC has been issued with a new certificate or token.
• The existing token has been replaced.
• The authorised signatory has changed.
• The registered certificate is no longer working or is not being detected by the portal.

In such cases, the taxpayer should log in to the GST Portal and use the Register/Update DSC facility, as applicable. If the authorised signatory has changed, the GST registration profile should first reflect the correct authorised signatory details.

The new certificate must be valid and should correspond to the authorised signatory selected on the GST Portal.

Common Issues During DSC Registration

Taxpayers may face errors while registering or using a DSC due to the following reasons:

• Expired or invalid DSC certificate.
• Incorrect DSC token PIN or password.
• Missing or incorrectly installed token drivers.
• emSigner not running or not launched with the required permissions.
• Incompatible emSigner version, particularly when using newly issued DSC tokens.
• Incorrect authorised signatory details in the GST profile.
• System configuration or Java compatibility issues.

Before attempting to register the DSC again, check the token, certificate validity, driver installation and emSigner version.

Conclusion

Registering a DSC on the GST Portal is a straightforward process when the DSC token, emSigner utility, system configuration and authorised signatory details are correctly set up.

Taxpayers should check their DSC validity and test the signing facility before filing important GST applications or returns. Users receiving newly issued DSC tokens from 21 September 2026 onwards should ensure that emSigner version 3.3 is installed to avoid compatibility issues.

How TaxAcumen Can Help

TaxAcumen provides clear, practical insights on taxation, GST, company law and business compliance. Stay informed with our latest updates to make timely and well-informed decisions. Get in touch with us for a professional consultation.

Disclaimer: This article is for general informational purposes only and does not constitute legal or tax advice. The applicability of the GSTN advisory, appeal limitation period, pre-deposit, and procedural requirements should be assessed based on the specific order and applicable law.