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The Central Board of Direct Taxes (CBDT) has announced a major relief for taxpayers whose Income Tax Returns (ITRs), filed electronically by March 31, 2024, were rejected due to technical errors. These returns will now be reprocessed, and in cases of delayed refunds, taxpayers will also receive interest as per legal provisions. Here's everything you need to know about this update, how it works, and what steps affected individuals can take.

Why This Move Matters

Over the past year, a number of taxpayers reported that their ITRs were incorrectly marked invalid by the Central Processing Centre (CPC) in Bengaluru. The rejections were primarily due to technical mismatches or system errors—not any fault of the taxpayer. However, as the deadline to process such returns had already passed (e.g., for AY 2023–24, it was December 31, 2024), many individuals were left without their legitimate refunds.

Recognizing the issue, the CBDT has now allowed these ITRs to be re-evaluated and processed once again.

What the New Directive Says

The CBDT, under Section 119 of the Income Tax Act, 1961, has granted a one-time relaxation to reprocess those ITRs filed on or before March 31, 2024, which were rejected due to technical issues. This means:

• Returns previously marked invalid or rejected will now be reviewed again.

• Taxpayers can expect to receive refund-related updates by March 31, 2026.

• The objective is to ensure that genuine filers are not penalized for system-level mistakes.

Interest for Delay in Refund

As per Section 244A of the Income Tax Act, any delay in issuing income tax refunds—especially when the delay is due to the department’s fault—entitles the taxpayer to interest on the delayed amount.

This is a significant advantage for those who’ve been waiting for their refunds, sometimes for over a year. The interest will be automatically calculated and added to the refund amount.

Note: To be eligible for refund and interest, it is mandatory for the PAN and Aadhaar to be linked. If not linked, the refund will not be processed.

How to Check Refund Status or Lodge a Complaint

If you still haven’t received your refund, you can raise a grievance using one of the following platforms:

1. CPGRAMS (Centralized Public Grievance Redress And Monitoring System) Portal

2. e-Nivaran / Income Tax Grievance Redressal Portal

3. Income Tax Department Helpdesk

Here’s a step-by-step guide to filing a complaint on the e-Nivaran portal:

How to File a Complaint:

• Visit: incometax.gov.in/eportal

• Log in using your credentials

• Go to the “Grievances” section → Click on “Submit Grievance”

• Choose the relevant department (e.g., CPC-ITR, NSDL, SBI, etc.)

• Select sub-category: “Refund not received”

• Fill in PAN, Assessment Year, ITR Acknowledgment Number, and issue description

• Upload supporting documents and submit the request

Key Takeaways:

• ITRs rejected due to system or data mismatch errors (filed by March 31, 2024) will be reprocessed.

• Refund updates will be shared by March 31, 2026.

• Interest will be paid on delayed refunds under Section 244A.

• PAN-Aadhaar linking is essential to receive refunds.

• Complaints can be filed online via the Income Tax Grievance Portal or other official channels.

Final Word

This move by the CBDT brings long-awaited relief to thousands of taxpayers stuck in refund limbo due to system errors. By offering interest on delays and allowing reprocessing of ITRs, the department aims to restore trust and provide fair redressal. Taxpayers are advised to keep their documents ready and ensure their PAN-Aadhaar linkage to avoid any further delays in receiving their rightful dues.