Income Tax Rules: Big Relief for Taxpayers! TDS and Errors Now Corrected Instantly, Refunds to be Processed Faster

Income Tax Rules: There is great news for taxpayers after filing their income tax returns. From now on, corrections related to TDS, interest calculations, or other minor errors will be resolved immediately. Consequently, there will be no more delays in receiving tax refunds. It was often seen that after filing their income tax returns, taxpayers faced problems like incorrect tax demand notices or delayed refunds. The biggest issue in these cases was that even minor errors took months to correct.

Until now, the main reason for this delay was the lengthy exchange of files between the Assessing Officer (AO) and the Centralized Processing Center (CPC). However, the Central Board of Direct Taxes (CBDT) has simplified and expedited this entire process.

CBDT’s New Notification and Enhanced Powers for CPC

Under a notification issued on October 27, 2025, the Commissioner of Income Tax (CPC) in Bengaluru has been granted special powers. This new authority empowers the CPC to directly correct all calculational or accounting errors that previously required the approval of the Assessing Officer (AO).

Previously, if there was an error, such as a TDS or TCS mismatch, an error in advance tax calculation, or an incorrect calculation of interest under Section 244A, taxpayers had to make multiple visits to the AO’s office. The AO would send the file to the CPC, and the CPC would in turn seek clarification from the AO. This entire process often took two to six months. But under the new rules, the CPC will now be able to rectify such cases on its own.

Which Mistakes Will Be Corrected Quickly?

Thanks to the new rules, the following errors will be corrected much faster:

• Incorrect calculation of TDS or TCS: Any discrepancy in the amount of TDS or TCS deducted.
• Overlooking advance or self-assessment tax: If the deposited advance tax is not considered in the calculation.
• Error in a previously issued refund: If there was a mistake in the amount of a previous refund.
• Incorrect calculation of interest: Any error in the calculation of interest payable or receivable.
• Error in tax or refund amount: If there is a mistake in the final tax or refund figure.

If necessary, the CPC can now also directly issue a revised demand notice under Section 156.

According to accountants, this change is a major relief for taxpayers. Corrections that previously took months can now be completed in a matter of days. This move will expedite the resolution of both tax demand errors and refund delays. Overall, this decision will make tax administration more transparent and reduce the harassment of taxpayers.