IT Refunds to Be Cleared by Next Month; New Income Tax Bill Set for April 2026 Rollout

All Pending IT Refunds to Be Released by Next Month, Government Prepares New Tax Bill for 2026

The Income Tax Department will clear all pending refund cases by next month, according to CBDT Chairman Ravi Agrawal. While refunds involving smaller amounts have already been processed, several high-value cases were delayed due to discrepancies in claims and mismatched documents. Agrawal shared these updates during an exclusive conversation with CNBC-Awaaz, where he also confirmed that the new Income Tax Bill is expected to come into effect from April 2026.

The chairman explained that the upcoming tax reforms aim to simplify compliance, streamline procedures, and offer taxpayers a clearer, easier-to-navigate system. New forms and rules under the revised tax law will be released either by the end of this year or by January 2026.

Refund Process Nearing Completion

Agrawal stated that the smaller refunds had already been credited to taxpayers’ accounts, but several larger refunds were flagged due to errors. Many taxpayers, he said, made incorrect claims, claimed ineligible exemptions, or submitted documents that did not match their filings. In such cases, the Income Tax Department issued notices requesting clarifications.

The review of these pending cases is now in its final stage, and the department expects to settle all refunds by next month. This will bring relief to taxpayers who have been waiting for their dues due to verification issues.

New Income Tax Bill to Be Implemented from April 2026

Discussing the broader tax landscape, Agrawal emphasized that the government is moving ahead with implementing the new Income Tax Bill from April 2026. The goal of the revised legislation is to make India’s tax framework simpler and more transparent.

Key objectives of the new bill include:

• Making tax laws easier for taxpayers to understand

• Eliminating unnecessary complexities in compliance

• Streamlining procedures for filing and refunds

• Providing a more user-friendly, predictable tax environment

Agrawal added that the government plans to release the new tax forms and rules by December 2025 or January 2026, giving taxpayers ample time to familiarize themselves before the bill’s rollout.

New Tax Forms Designed to Be More User-Friendly

The CBDT Chairman highlighted that the upcoming Income Tax forms will be significantly simpler. The intention is to create short and clean forms that ordinary taxpayers can easily understand.

Features of the new tax forms include:

• Removal of unnecessary columns

• Elimination of redundant details

• Simplified language and layout

• More efficient and faster e-filing process

These changes aim to reduce the burden on taxpayers, particularly those who find the current system confusing or time-consuming.

Agrawal noted that once the new Income Tax Act is simplified, the department will shift its attention toward improving taxpayer services even further. The focus will be on offering a hassle-free and transparent experience, ensuring that citizens can comply with tax laws without difficulty.

A Step Toward a Simpler and More Transparent Tax Regime

With pending refunds scheduled for resolution and a modernized Income Tax Bill set for 2026, the government is moving toward building a more efficient and taxpayer-friendly ecosystem. The overhaul—ranging from streamlined refunds to simplified filing processes—reflects a broader effort to enhance transparency, reduce delays, and make compliance easier for millions of taxpayers across the country.