CBDT Extends TDS Certificate Issuance Deadline for Q3 FY 2025-26

In a significant development offering relief to numerous deductors and taxpayers, the Central Board of Direct Taxes (CBDT) has announced an extension for the issuance of Tax Deducted at Source (TDS) certificates for the third quarter of the financial year 2025-26. The new deadline for issuing these crucial certificates, which cover the quarter ending December 31, 2025, is now March 31, 2026.

Reason for the Extension: E-filing Portal Glitches

The decision to extend the deadline stems from widespread representations received by the CBDT regarding significant technical glitches encountered on the income tax e-filing portal. These persistent issues reportedly hampered the ability of deductors, including employers, banks, and other entities, to generate and issue TDS certificates (Form 16 for salaried individuals and Form 16A for non-salary payments) within the originally prescribed timelines.

The CBDT officially acknowledged these difficulties as a case of “genuine hardship,” making it impractical for many to comply with the original mid-February deadline for Q3 certificates.

Official Notification and Legal Basis

This crucial extension has been formally notified through a CBDT Circular No. 2/2026, dated March 26, 2026. The circular was issued under Section 119 of the Income-tax Act, 1961, which empowers the Board to relax compliance timelines in instances of genuine hardship. Importantly, any TDS certificate issued by the revised deadline of March 31, 2026, will be considered as having been issued within the prescribed timeline, thereby shielding deductors from potential penalties linked to delayed issuance.

Impact on Deductors and Taxpayers

• For Deductors: The extension provides much-needed breathing room to complete the generation, validation, and distribution of TDS certificates without the fear of penalties. It reduces the burden of compliance caused by system instability and ensures that they can issue accurate, system-validated certificates.
• For Deductees (Taxpayers): While there might be a slight delay in receiving certificates, the extension ultimately benefits taxpayers by ensuring they receive correct and duly issued Form 16/16A. This is critical for accurate income tax return filing and reconciling tax credits with Form 26AS, especially as the ITR filing season for Assessment Year 2026-27 approaches.

Tax professionals have lauded this move as a pragmatic and responsive approach by the CBDT, demonstrating the Board's willingness to address real-world challenges faced by the tax ecosystem.