Tax refunds scrutiny: CBDT flags wrongful claims; why high-value payouts are stuck-here’s what the IT department says

The Income tax department is holding back a chunk of refund payments after detecting wrongful deduction claims in several high-value and system-red-flagged filings, CBDT Chairman Ravi Agrawal said on Monday, PTI reported. Legitimate refunds, he added, should be cleared “this month or by December”.Speaking to reporters on the sidelines of an event at Bharat Mandapam, Agrawal said the department is scrutinising a set of returns flagged by the system for questionable claims. “We have also written to taxpayers to file a revised return in case they have forgotten something,” he said.While low-value refunds are being released, the more significant ones are under verification. “We have analysed and found that some wrong refunds or deductions were being claimed. So, this is a continuous process,” Agrawal noted after inaugurating a taxpayers’ lounge at the India International Trade Fair.According to official data updated till November 10, refund outgo has fallen around 18% year-on-year to over Rs 2.42 lakh crore, a drop Agrawal said may reflect lower claims and rationalised TDS rates.The CBDT Chairman said the department is also pushing to reduce litigation in direct tax matters. “Our appellate authorities are working overtime to ensure that pendency is liquidated,” he said. The backlog, he explained, swelled during the Covid years but disposals have risen sharply.“This year, more than 40% higher disposals have happened in appeals compared to last year. I think we will end the year with a much, much higher number of appeals disposed of,” Agrawal added.