Refund Delays Due to Red-Flagged Claims, Says CBDT; Pending Refunds by December

Central Board of Direct Taxes Chairman Ravi Agarwal has said that the budgeted income tax collection target of ₹25.20 lakh crore for the current financial year 2025-26 is achievable. Speaking at the inauguration of the taxpayers' lounge at the India International Trade Fair on Monday, Agarwal said, "Direct tax collections are growing at the rate of 6.99% compared to last year. This is an encouraging trend, and taxpayer response has been good." We hope to achieve the tax collection target of ₹25.20 lakh crore by the end of the year.

In the current financial year 2025-26, net direct tax collections rose by 6.99 percent between April 1 and November 10 to more than ₹12.92 lakh crore. Corporate tax collections and slow refund rates were the main reasons. Refunds of ₹2.42 lakh crore were issued till November 10, a decrease of 18 percent.

Regarding the new income tax rules, which will come into effect from April 1, the CBDT Chairman said that the new rules and forms are expected to be notified by the end of the year or January 2026. He said, "ITR forms should be relevant and based on the principle of ease of doing business, so that there is no unnecessary burden on taxpayers. Therefore, we are working towards implementing them by January." Agarwal said, "Our aim is to make the new income tax forms simple and easy for taxpayers, as this is the primary means through which compliance is ensured."

Regarding the delay in issuing refunds, Agarwal said, "An investigation found that some incorrect refunds or deductions were being claimed. The department is analyzing some refund claims that were of high amounts or were red-flagged by the system. This is an ongoing process. Taxpayers have also been asked to file revised returns if they have missed anything." He said, "We hope to issue the remaining refunds this month or by December. However, refunds of smaller amounts are being issued."