CBDT’s New Guidelines for Handling Delayed Income Tax Refund Claims: What Taxpayers Should Know
The Central Board of Direct Taxes (CBDT) has introduced clear guidelines for dealing with delays in filing income tax returns (ITRs) related to refund claims and carrying forward losses. These updated rules replace previous instructions and streamline the process for taxpayers who missed deadlines.
Here’s a breakdown of the key points:
Authority to Handle Delayed Claims Based on Refund Amounts
The CBDT has clarified which officials handle refund claims, depending on the refund amount:
- Up to ₹1 crore: Principal Commissioners of Income Tax (Pr. CsIT) are responsible for claims within this range.
- ₹1 crore to ₹3 crore: Chief Commissioners of Income Tax (CCsIT) will manage claims in this bracket.
- Above ₹3 crore: Principal Chief Commissioners of Income Tax (Pr. CCsIT) oversee larger claims.
Additionally, the Bengaluru Central Processing Centre (CPC) will manage delays in verifying ITR-V forms.
Time Limits for Filing Applications
Taxpayers must file for condonation of delay within five years from the assessment year’s end. These rules apply to claims filed after October 1, 2024. Once filed, authorities should aim to process the applications within six months, ensuring timely resolution.
Conditions for Claim Approval
To get approval, taxpayers must show a valid reason for missing the deadline. This could include hardships or unavoidable circumstances. Authorities may ask a local tax officer to review the case further.
Court Orders and Special Cases
If a refund arises from a court order, the five-year limit does not include the time the case was pending in court. Once a court order is issued, taxpayers have six months to file their application for condonation.
Claims for additional refunds (supplementary refunds) after an original assessment may also be eligible for review under these rules.
No Interest on Late Refunds
Taxpayers should note that no interest will be paid on delayed refunds. Even if the refund is approved, the amount will be issued without additional interest.
Conclusion
These updated CBDT guidelines provide clarity for taxpayers with delayed refund claims or loss carry-forwards. By specifying authorities, setting time limits, and laying out the conditions for approval, the CBDT has streamlined the process. Taxpayers must ensure that they meet all requirements and provide necessary evidence for delays. Consulting with a tax professional may help ensure that claims are filed correctly and processed smoothly.
References:
CBDT’s New Rules on Delayed ITR Claims and Refunds. CNBC TV18: Source