The Central Board of Direct Taxes (CBDT) has announced that certain income-tax refunds for the year 2025 are facing delays due to a thorough review process of high-value refunds and cases with flagged unusual or incorrect deductions. However, genuine refunds are assured to be processed by December.
CBDT Chairman Ravi Agrawal explained that the tax department is scrutinizing returns with suspicious claims or deductions, which have been marked for further analysis. Taxpayers have also been urged to submit revised returns if they missed including vital information.
Refunds of lower amounts have already been disbursed promptly, although the department detected numerous erroneous claims during their assessments, necessitating more in-depth examinations. The goal is to finalize all pending refunds by the end of this month or by December.
Official data reveals a decline of approximately 18% in refunds to over Rs 2.42 lakh crore from April 1 to November 10 this year, partly attributed to a decrease in refund claims despite relaxed TDS rates.
In an effort to reduce tax litigation, the CBDT is actively resolving pending appeals. Despite a backlog accumulated during the Covid period, the pace of resolution has improved this year. Agrawal highlighted that over 40% more appeals have been settled compared to the previous year, with expectations to close numerous cases by year-end.
Agrawal emphasized that these initiatives aim to streamline and expedite the refund process for honest taxpayers, expecting significant reductions in refund delays once flagged cases are resolved.