CBDT chief confident of FY26 tax target, refunds to be cleared by December

New Delhi: Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal on Monday expressed confidence that the government will meet the FY26 direct tax collection target of Rs 25.20 lakh crore, even as the Income-Tax Department works through delays in refund payouts and prepares for the rollout of the simplified Income Tax Act, 2025.

Speaking at the inauguration of the Taxpayers’ Lounge at the India International Trade Fair (IITF), Agrawal said direct tax collections are growing at 6.99 per cent year-on-year, supported by robust corporate tax inflows. Net collections stood at Rs 12.92 lakh crore between April 1 and November 10, with refunds dipping 18 per cent to Rs 2.42 lakh crore during the same period. “We hope to meet the target by year-end. Taxpayer response has been good,” he said, adding that two advance tax instalments remain.

Agrawal acknowledged delays in issuing refunds, explaining that several claims had been flagged as high-value or potentially incorrect. “We found some wrongful deductions being claimed. Low-value refunds are being released, and we expect pending payouts to be cleared by December,” he said. The department has asked some taxpayers to file revised returns if necessary.

He added that negative growth in refunds may reflect a fall in claims, aided by rationalised TDS rates. The CBDT is also prioritising the reduction of tax litigation. “Appellate authorities are working overtime. Disposal of appeals this year is over 40 per cent higher than last year, and we expect a significantly higher number to be closed by March,” he said.

On the new Income Tax Act, 2025 — passed by Parliament in August and set to take effect from April 1, 2026 — Agrawal said the revamped ITR forms and rules will be notified by January. The aim is to simplify compliance by redesigning forms with clearer structures and reducing complexity.

The new law replaces the 1961 Income Tax Act, cutting the number of sections from 819 to 536 and chapters from 47 to 23. Its language has been modernised, slashing word count from 5.12 lakh to 2.6 lakh and introducing 39 tables and 40 formulas to replace dense legal text.

Agrawal said the Directorate of Systems is coordinating with the tax policy division to finalise forms such as ITRs and TDS returns, which will be vetted by the law ministry before being placed before Parliament. The intent, he emphasised, is to give taxpayers ample time to adapt: “The forms must reflect ease of doing business. We aim to put everything in place by January so taxpayers can adjust their systems well before implementation.”