CBDT confident of meeting FY26 tax target; refund checks slowing outflows

Chairman Ravi Agarwal says the department expects to meet its ₹25.2 trillion direct tax goal for FY26, with refunds slowing due to verification of incorrect claims and a dip in filings this year

Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal on Monday said he is confident of achieving the direct tax collection target of ₹25.2 trillion for 2025-26 (FY26). The third advance tax instalment, due later this month, will give a clearer picture of personal income tax growth and securities transaction tax (STT) trends, he added. 

Net direct tax collections reached ₹12.92 trillion as of November 10, up 7 per cent year-on-year (Y-o-Y), according to government data. 

Agarwal said the department has also begun reviewing cases where income tax refunds were claimed incorrectly, leading to a temporary halt in payouts until the checks are completed. The verification exercise is expected to be finished by the end of December. 

“We found some refunds were claimed incorrectly. We have written to those taxpayers. Verification is underway, and will be corrected by December-end,” Agarwal said. Refunds flagged for discrepancies, he added, will be cleared only after scrutiny. 

The review comes at a time when refund outflows have slowed sharply. CBDT data shows refunds at ₹2.42 trillion as of November 10 in FY26, 17.7 per cent lower than the same period a year ago. 

Agarwal said deductions claimed under the old tax regime are also being verified before issuing refunds. The dip in refund numbers, he said, reflects two factors — fewer refund claims filed this year, and some incorrect claims currently under reassessment. He said this year’s slower refund outflow also reflects the impact of tax deducted at source (TDS) rationalisation. 

On the large pendency of over five lakh appeals before the Commissioner of Income Tax (Appeals), Agarwal said the CBDT is aware of the issue, and is taking corrective measures. He pointed out that appeal disposals have risen by 40 per cent this year compared to last year. 

Agarwal informed that the CBDT will publish the forms and rules under the new Income Tax Act, 2025 by the end of December.