Now Get Faster Tax Refunds and Easier ITR Corrections: New CBDT Rules Explained

The Central Board of Direct Taxes (CBDT), through its notification dated October 27, 2025, has authorized the Commissioner of Income Tax (CPC), Bengaluru, to exercise concurrent jurisdiction under Section 154 of the Income Tax Act, 1961. This change enables the CPC to identify and correct apparent mistakes in cases where assessment orders have been processed jointly by the Assessing Officer (AO) and the Centralized Processing Centre (CPC).

With this reform, CBDT aims to streamline the Income Tax Return (ITR) correction and refund process, reducing delays and simplifying compliance for taxpayers. The move will help minimize manual intervention by tax officers, address taxpayer grievances more efficiently, and accelerate refund disbursals.

By empowering the CPC, Bengaluru, the government has allowed the direct rectification of errors apparent on record including TDS mismatches, incorrect interest calculations, or data discrepancies without the need for extensive reprocessing or prolonged administrative procedures.

The notification also states that in pursuance of the above subsection, the Centralized Processing Centre is authorized to rectify computational and accounting errors commonly found during return processing. These include cases involving non-consideration of prepaid tax credits, omission of eligible reliefs, or incorrect computation of interest under Section 244A. Where applicable, the CPC may also issue corresponding tax demand notices under Section 156 to ensure proper reconciliation and compliance.

How does this help taxpayers?

1. Faster accounting discrepancy resolution

Previously, rectifying assessment order errors due to mismatch in TDS/TCS entries, advance tax payments, or refund computation required intervention by jurisdictional Assessing Officers only, which often led to procedural delays. This facility will now enable CPC to correct these defects themselves with greater speed, leading to quicker resolution of tax credit mismatches and reducing the turn-around time for taxpayers.

2. Less Administrative Red Tape and Delays

The centralization of Section 154 rectifications in cases of AO–CPC interface through the CPC makes the entire process digitally managed and centrally coordinated. It greatly reduces interdepartmental communication, duplication of processing, and manual transfers of files between the field offices and CPC, thus enhancing overall efficiencies.

3. Prompt Refunds and Accurate Interest Adjustments

Any mistake in the refund calculation or interest computation under Section 244A can now be rectified quickly under the new system through the automated platform of the CPC. This guarantees timely issuance or correction of refunds without requiring taxpayers to make repeated follow-up requests or representations. 4. Improved Transparency and Simpler Compliance The centralized data-driven rectification system provides for greater transparency and accountability because it ensures the correct reflection and reconciliation of the taxpayer's prepaid tax credit, deductions, and reliefs in his tax records. Automation at the CPC enhances traceability and minimizes human error for easier and more reliable compliance by the taxpayers or their professionals.

CBDT Notification: Empowering CPC Bengaluru with Concurrent Jurisdiction under Section 154

In its Notification No. 155/2025 [F. No. CB/362/2025-O/o Addl. DIT 6 CPC Bengaluru-187/10/2024-ITA-I], dated October 27, 2025, the Central Board of Direct Taxes (CBDT), exercising its authority under sub-sections (1) and (2) of Section 120 of the Income Tax Act, 1961, has officially delegated concurrent powers to the Commissioner of Income Tax (CPC), Bengaluru.

Under this notification, the Commissioner has been directed to:

1.    Rectify mistakes apparent from the record under Section 154 of the Income Tax Act, 1961.
These include:

o    Errors related to refunds issued earlier,

o    Non-consideration of prepaid tax credits or eligible reliefs, and

o    Incorrect computation of interest under Section 244A,
resulting in any miscalculation of tax, refund, or demand.

2.    Issue notices of demand under Section 156, wherever such rectifications lead to revised tax or refund determinations.

The notification further authorizes a hierarchical delegation of powers:

• The Commissioner of Income Tax (CPC) may issue written orders enabling Additional or Joint Commissioners to exercise these powers within their respective jurisdictions.
• In turn, these officers may authorize Assessing Officers under their supervision to perform corresponding functions concerning specific territories, classes of persons, income categories, or cases.

This structured delegation ensures that rectification of computational and accounting errors can now be handled directly and efficiently through the CPC’s automated system, strengthening administrative efficiency and consistency in tax processing.

Conclusion

The latest notification by CBDT is a significant leap for India's tax administration setup. The concurrent jurisdiction so provided to CPC, Bengaluru, is a major step toward digital governance, faster processing of refunds, and lesser compliance on the part of a taxpayer.

This reform bridges the operational gap between the Assessing Officer and the CPC by ensuring that routine computational and accounting errors, such as TDS mismatches, unclaimed tax credits, and incorrect interest calculation, can now be corrected seamlessly through an automated and centralized mechanism.

This change indeed means faster resolutions, reduced administrative and compliance requirements, and more transparency in the income-tax processing for taxpayers and professionals. The system-driven rectification model enhances efficiency and reinforces the commitment of the government toward a smart, technology-enabled, taxpayer-friendly ecosystem.

The initiative, in sum, represents the vision of the CBDT to make income tax processes in India more accurate, accountable, and accessible, building trust and ease of compliance for citizens and businesses alike.

 FAQ

Q1. What is the key purpose of the new CBDT notification issued on October 27, 2025?
A: The main objective is to streamline the Income Tax Return (ITR) correction and refund process. By authorizing the CPC, Bengaluru to rectify errors under Section 154 of the Income Tax Act, the CBDT aims to reduce delays, minimize manual intervention by Assessing Officers, and speed up refund disbursals for taxpayers.

Q2. What types of errors can now be corrected directly by the CPC?
A: The CPC can now fix computational and accounting errors such as:

• Non-consideration of prepaid tax credits or eligible reliefs
• Incorrect computation of interest under Section 244A
• Mismatches in TDS/TCS data or advance tax
• Errors in refund calculation or demand generation

Q3. How does this change help taxpayers?
A: Taxpayers can now expect:

• Faster resolution of tax credit mismatches and accounting discrepancies
• Quicker refunds with accurate interest computation
• Reduced administrative delays, since rectifications are managed digitally through the CPC
• Greater transparency in how their prepaid taxes, deductions, and reliefs are reconciled

Q4. What role does Section 154 play in this notification?
A: Section 154 of the Income Tax Act allows for the rectification of mistakes apparent from the record. The new notification extends this power to the CPC, allowing it to correct such errors for cases processed jointly by the Assessing Officer (AO) and the CPC.

Q5. Can the CPC issue tax demand notices after rectification?
A: Yes. If rectification leads to a revised computation resulting in additional tax liability, the CPC can issue notices of demand under Section 156 to ensure proper reconciliation and compliance.

Q6. How will this change reduce delays and manual errors?
A: The process is now fully centralized and system-driven, minimizing the need for communication between field offices and the CPC. Automation also reduces manual data entry errors, leading to faster, more accurate tax processing.

Q7. What does this reform mean for businesses and accounting professionals?
A: It simplifies compliance and enhances reliability in tax filings. Professionals can now rely on the CPC’s automated system for quick corrections, ensuring their clients experience faster refunds, fewer disputes, and greater confidence in digital tax governance.

Q8. How does this align with India’s digital governance goals?
A: The reform reflects the government’s ongoing push toward technology-driven tax administration. By integrating automation and centralized processing, CBDT aims to make income tax compliance smarter, transparent, and more taxpayer-friendly.