The Central Board of Direct Taxes has begun reviewing cases of wrongly claimed income-tax refunds and has held back payouts until the checks are completed. Chairman Ravi Agarwal said the verification exercise should be wrapped up by the end of December.
“We found some refunds were claimed incorrectly, and we’ve written to those taxpayers. The verification is underway and will be corrected by December,” he said, adding that refunds flagged for discrepancies will be cleared only after scrutiny.
The review comes at a time when refund outflows have dropped sharply. CBDT data shows refunds at Rs 2.42 lakh crore as of November 10 in FY26, about 17.7 percent lower than the same period last year.
Meeting Budget Target
Agarwal said he is confident of meeting the direct tax collection target of Rs 25.2 lakh crore for FY26. The third advance tax instalment, due this month, will offer a clearer view of personal income-tax growth and Securities Transaction Tax trends.
Net direct tax collections touched Rs 12.92 lakh crore by November 10, up 7 percent year-on-year.
Why refunds have slowed
Agarwal said deductions claimed under the old tax regime are also being verified before refunds are issued. The dip in refund numbers, he added, reflects two things: fewer refund claims filed this year and some incorrect claims now under reassessment.
Revised return deadline extended
The government has extended the deadline for filing revised returns to December 31, giving taxpayers more time to correct errors. Agarwal also said the CBDT plans to publish the forms and rules under the new Income Tax Act by the end of December.
