ITR Rectification Made Easy: How New CBDT Rules Ensure Faster Tax Refunds

As tax professionals, one of the most common grievances we hear from Indian taxpayers is the long wait for an income tax refund. Worse yet is seeing your hard-earned refund being reduced or held back because of a simple, obvious error, like a TDS mismatch. We all know the frustrating cycle: you file your ITR, the CPC processes it and issues an intimation under Section 143(1) with a mistake. You then file an ITR rectification request under Section 154, and… the wait begins. This is because, until now, your request was often forwarded to your local Assessing Officer (AO), creating a long delay.

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But there is excellent news. The Central Board of Direct Taxes (CBDT) has introduced a game-changing new rule to break this very bottleneck. This move is a massive relief for taxpayers, designed specifically to ensure faster tax refunds and make corrections a simple, digital process.

Let’s, as your finance and tax guides, break down exactly what this new rule is, what problems it solves, and how you can use it.

The Old Problem: Why Was ITR Rectification So Slow?

Imagine the Income Tax Department as a large organization. The CPC, Bengaluru, is like a massive, high-speed national processing hub. It handles millions of ITRs electronically with great speed.

Your Assessing Officer (AO), on the other hand, is like your local branch manager, handling specific, complex cases for your jurisdiction (your area).

The problem was one of “jurisdiction” (who has the power to act). When the CPC processed your return and made an obvious mistake (like not counting your advance tax), it couldn’t fix the mistake itself after issuing the order. Your rectification request had to be sent to the local AO. This meant your digital file entered a manual queue, leading to paperwork, inter-office communication, and long delays for you.

The New Solution: CBDT Notification No. 155/2025.

On October 27, 2025, the CBDT issued Notification No. 155/2025. This notification gives “concurrent jurisdiction” to the Commissioner of Income Tax (CPC), Bengaluru, to exercise rectification powers under Section 154.

What this means in simple English: The CPC, your high-speed national hub, now has the direct power to fix these common mistakes itself. It no longer needs to send your file to the local AO. Your rectification request can be filed online and will be resolved online, by the same department that processed your return.

Whose Cases Does This Apply To?

The notification’s schedule is very specific. This new power applies to: “All the cases where the orders have been passed through the interface between Assessing Officer and the Centralized Processing Centre.”

This targets the exact bottleneck where files used to get stuck between the two departments, ensuring a smoother, faster process for you.

What is a “Mistake Apparent from the Record”?

This is a key legal phrase. A “mistake apparent from the record” is an error that is obvious and does not require any long investigation or debate. For example:

• Your Form 26AS clearly shows ₹50,000 in TDS, but the CPC intimation only gave you credit for ₹40,000.
• You paid ₹20,000 in advance tax, have the challan, but it was not factored into your final tax calculation.
• A simple mathematical error, like 2+2=5, in the order.

This new rule applies *only* to these obvious errors, not to complex legal arguments or new claims that were not in your original ITR.

What Specific Errors Can CPC Fix Now?

This is the most important part for you as a taxpayer. The notification explicitly empowers the CPC to rectify “mistakes which are apparent from records,” including:

• Pre-paid Tax Credit Mismatch: This is the biggest one. The notification calls this “non-consideration of any pre-paid tax credit.” This means if your TDS, TCS, or advance tax was not fully credited, the CPC can now fix it.
• Non-consideration of Reliefs: The text is direct: “non-consideration of any relief eligible.” If you claimed a specific tax relief (like relief under Section 89) and it was incorrectly overlooked during processing, this can now be corrected.
• Incorrect Interest Calculation: The order clearly states “calculation of interest u/s 244A.” If the interest you were supposed to receive on your refund was calculated wrongly (or not given at all), this can be rectified.
• Other Computational Errors: The notification covers any “error in computation of the Tax and/or refund determined and/or demand.” This is a broad category for any obvious mathematical or accounting errors in the order.

Step-by-Step Guide: How to File an ITR Rectification (Sec 154) Online

So, you’ve received an intimation with one of these mistakes. What do you do? Follow these steps on the income tax portal.

1. Log in to the e-Filing Portal
   • Visit the official Income Tax e-Filing website.
   • Log in using your PAN and password.
2. Navigate to the Rectification Section
   • On your main dashboard, click on the ‘Services’ tab.
   • From the dropdown menu, select ‘Rectification’.
3. Start a ‘New Request’
   • On the Rectification page, click the ‘New Request’ button.
   • Your PAN will be auto-filled. You must select the ‘Assessment Year’ (AY) for which you want to file the rectification (e.g., for FY 2024-25, the AY is 2025-26).
   • Click ‘Continue’.
4. Select the Order to be Rectified
   • The portal will show you the CPC Order/Intimation (e.g., ‘Intimation u/s 143(1)’) issued for that AY.
   • Select this order to proceed.
5. Choose the ‘Reason for Rectification’
   • This is the most critical step. You will be given a list of reasons.
   • Select the most appropriate one. For TDS or advance tax issues, the correct reason is “Tax Credit Mismatch”.
   • Once you select this, the relevant schedules from your ITR (like TDS, TCS, Advance Tax) will open up.
6. Provide the Correct Details
   • Carefully check the figures. The portal will show the figures from your processed return.
   • Enter the correct figures in the editable columns based on your Form 26AS or AIS.
   • You can add or delete entries as needed. Make sure your final claim matches your supporting documents.
7. Submit and E-Verify
   • Once you have corrected the details, click ‘Submit’.
   • The portal will ask you to e-verify the rectification request. The fastest way is using an Aadhaar OTP.
   • Your request is filed only *after* successful e-verification.

After submission, your request will be processed by the CPC itself. Thanks to this new rule, the resolution is expected to be significantly faster, finally getting you the correct refund you deserve without the long wait.

This is a welcome step towards a truly faceless and efficient tax system, and it’s a big win for the honest taxpayer.

Disclaimer: The information provided in this article is for general informational purposes only and is based on the author’s understanding of the CBDT notification (S.O. 4901(E)) dated October 27, 2025. While we strive to keep the information up-to-date, tax laws are subject to change. This article is not a substitute for professional tax advice. Please contact us or consult a qualified tax professional for advice on your specific situation.

Frequently Asked Questions (FAQs).

Q1: What is the main benefit of this new CBDT rule?

A: The main benefit is speed. By giving the CPC, Bengaluru, the power to fix common errors (like TDS mismatch) directly, it cuts out the long delay of sending the file to a local Assessing Officer. This means faster ITR corrections and faster tax refunds.

Q2: Does this apply to all ITR mistakes?

A: No. This applies only to “mistakes apparent from the record,” which are obvious errors like tax credit mismatches, advance tax not being counted, or clear calculation errors. It does not apply to complex legal arguments or new claims not made in the original return.

Q3: How do I file for this rectification?

A: You can file a rectification request online under Section 154 through your income tax portal. Go to ‘Services’ > ‘Rectification’, select the Assessment Year, and choose the correct reason, such as “Tax Credit Mismatch”.

Q4: Do I need to send any physical documents to the CPC?

A: No. The entire process is digital. Your claim for tax credit will be verified electronically against the data in your Form 26AS and Annual Information Statement (AIS).

Q5: What if my rectification is rejected by the CPC?

A: If your rectification request is rejected, the CPC will pass an order stating the reason. You would then need to explore other legal remedies, such as filing an appeal, for which you should definitely consult a tax professional.

C.K. Gupta

Hello, I am C.K. Gupta Founder of Taxgst.in, a seasoned finance professional with a Master of Commerce degree and over 20 years of experience in accounting and finance. My extensive career has been dedicated to mastering the intricacies of financial management, tax consultancy, and strategic planning. Throughout my professional journey, I have honed my skills in financial analysis, tax planning, and compliance, ensuring that all practices adhere to the latest financial regulations. My expertise also extends to auditing, where I focus on maintaining accuracy and integrity in financial reporting. I am passionate about using my knowledge to provide insightful and reliable financial advice, helping businesses optimize their financial strategies and achieve their economic goals. At Taxgst.in, I aim to share valuable insights that assist our readers in navigating the complex world of taxes and finance with ease.