New Rectification Feature on Income Tax Portal Brings Relief to Taxpayers Amid Refund Delays

Nowadays, some common searches on Google are like “income tax,” “income tax e-filing,” “income tax refund,” and “income tax e-filing portal.” There are two key reasons behind these searches: one is that the income tax portal is not working smoothly or properly, and the second reason is that tax refunds are getting delayed day by day, distressing taxpayers.

The Income Tax Department has recently made two developments: one is correcting tax orders online, and the second is working on delayed refunds. One common thing in both of these developments is that they both directly affect how taxpayers interact with the income tax portal.

Recently, the Income Tax Department has introduced a new feature at the e-filing portal. The feature permits taxpayers to furnish rectification applications directly to the relevant authority. This feature is applicable to orders falling under specific categories like Transfer Pricing (TP) orders, Dispute Resolution Panel (DRP) directions, and revision orders.

Previously, taxpayers were required to furnish the rectification request manually and were required to submit it indirectly through the Assessing Officer (AO), despite some other authority being responsible for implementing the order. The introduction of this new feature has eliminated this drawback.

This basically means that now if taxpayers feel like there is a mistake on record, for correction, they can directly approach the main authority who has initially implemented the order.

Revision orders are also covered under this feature. Such orders are issued by senior income tax officials to revise an assessment under Section 263 if it is felt that the order is against the interest of the tax department or is illegal as per the law. Section 264 allows the tax authority to give relief to a taxpayer if a tax order has caused unfair loss or hardship to them.

The purpose of both Section 263 and Section 264 is to correct serious mistakes in tax orders and to make sure that tax laws are applied properly and fairly.

The previous method of rectification often led to delays, giving rise to confusion and repeated follow-ups. The new feature is aimed at reducing compliance burden, enhancing transparency, and making the correction process faster and smoother.

On the other hand, the searches related to income tax refunds are arising because several taxpayers have not received their tax refunds yet, even though it’s been more than 3 months since the passing of the ITR due date.

According to the reports, the Income Tax Department has received information from the “risk management framework” that some taxpayers are claiming “ineligible refunds” through deductions or exemptions that they are not entitled to, resulting in “understatement of income.” This is the key reason why refunds are getting delayed this assessment year.