As India prepares to replace its 65-year-old tax framework, the Central Board of Direct Taxes (CBDT) has clarified that pending income tax refunds will remain सुरक्षित after the new law comes into effect from April 1, 2026.
Ahead of the rollout of the Income Tax Act, 2025, the tax department released a detailed 99-page FAQ document to address taxpayer concerns. It confirmed that the transition from the Income-tax Act, 1961, will not impact existing financial claims.
According to the CBDT, all “rights and benefits” under the old law will continue to be legally valid even after the new Act is implemented.
“Rights, benefits, obligations or liabilities that arose under the old Act continue to exist. Thus, if a taxpayer was entitled to claim a refund under the old Act for any tax year prior to the commencement of the new Act, he still remains entitled to that refund even after the new Act comes into force,” the CBDT said in its FAQs released on 23 March.
An income tax refund refers to the amount returned by the tax department when a taxpayer has paid more tax than what was actually due.
Refund processing typically begins only after the income tax return is e-verified. In most cases, the refund is credited within 4-5 weeks. However, the tax department is legally allowed up to 9 months from the end of the financial year to complete the process.
The new Income Tax Act, 2025, will officially replace the existing law from April 1, 2026, marking a major shift in India’s taxation framework while ensuring continuity for taxpayers.
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