The present invention relates to a retractable correction tape-dispensing device (100). The device (100) generally comprises a housing; a supply spool (10), rotatably mounted on a supply spool spindle, for reeling the transfer tape (20) adhered with the film; a take-up spool (30), rotatably mounted on a take-up spool spindle for reeling the transfer tape (20) which has been blank-backed of the applied film; an application tip (40) displaceable between an application position and a retracted position, and the transfer tape (20) is spanned over the application tip (40); an actuating member (50), connected to the application tip (40), and manually operable to displace the application tip (40) back and forth between the application position and the retracted position; and means to propel the applicator tip into the retracted position. The device (100), to prevent the transfer tape (20) from being loosened, essentially comprises an applicator assembly (60) displaceable between the application position and the retracted position by the actuating member (50), a pair of tape tensioning arms (70) each extended from the corresponding sidewall (62) of the applicator assembly (60); and a pair of tape tensioning shafts (80) mounted on the housing.