CBDT Flags Wrongful High-Value IT Claims; Legitimate Claims To Be Processed By Dec

Income tax refunds on high-value claims are being delayed after the Income Tax department detected wrongful claims in several filings in the category, said a report by PTI. However, low-value claims are being released, and legitimate refunds for claims across ticket sizes are expected to be released by December, Central Board of Direct Taxes (CBDT) Chairman Ravi Aggarwal said Monday.

“We have analysed and found that some wrong refunds or deductions were being claimed. So, this is a continuous process,” PTI quoted Aggarwal as saying after inaugurating a taxpayers’ lounge at the India International Trade Fair (IITF).

Aggarwal said that the fall in claims, partly due to the rationalisation of Tax Deducted at Source (TDS) rates this year, led to the reduced growth in refunds. Direct Tax Collections data shows refund issuances dropped nearly 18 per cent to over Rs 2.43 lakh crore between April 1 and November 10. During the same time, net collections grew 7 per cent, grossing over Rs. 12.92 lakh crore.

Aggarwal also said that the department was taking steps to reduce litigation in matters relating to direct taxes. “...This year, more than 40 per cent, as compared to last year, disposal has been done in appeals, and I think we will end the year with a much, much higher number of appeals disposed of,” he told PTI.

Aggarwal also said the IT department will notify income tax return forms and rules under the simplified Income Tax Act, 2025, by January, said a report by Financial Express. This is to make tax compliance simpler and more taxpayer-friendly, he told the paper. The new income tax law, which will replace the Income Tax Act, 1961, comes into effect from April 1, 2026.