ITR marked invalid: The Central Board of Direct Taxes (CBDT) has decided to give more time for fixing income tax returns that were wrongly marked as invalid. These were returns that people had filed online but got rejected because of technical problems from the system’s side.
Central Board of Direct Taxes issues Circular 10/2025, providing relaxation of time limit for the processing of electronically filed income tax returns.
For detailed information, access the Circular 10/2025 via the link below:https://t.co/S9PYBjgvwn pic.twitter.com/T0fevCCD0S
— Income Tax India (@IncomeTaxIndia) July 28, 2025
Earlier the tax department’s Centralised Processing Centre (CPC) in Bengaluru had rejected many returns, saying they were invalid. This caused trouble for taxpayers who had filed everything correctly but didn’t get their returns processed. Some were even expecting refunds that never came.
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The deadline to fix such cases had ended on December 31, 2024, for Assessment Year 2023–24. But now, the CBDT has decided to give more time by using its special powers under Section 119 of the Income Tax Act. The new circular, which came out on July 28, 2025, says that these returns will be accepted again if they were filed online by March 31, 2024. The returns will now be processed, and the intimation under Section 143(1) will be sent to taxpayers by March 31, 2026.
How will Taxpayer be Affected?
Once these returns are reprocessed, people who are eligible for refunds will finally get the money back, including the interest as per Section 244A. But there’s one condition if a person’s PAN is not linked to Aadhaar, then the refund will not be given, as already stated in Circular No. 03/2023.
Chartered Accountant Suresh Surana said this move gives “a significant relief” to affected taxpayers. “By restoring the compliance validity of these returns, the CBDT has helped reduce risks such as double taxation or denial of TDS claims,” Surana added, reported Business Standard.
This decision is expected to help in a few ways. People who didn’t know their returns were rejected can now get their tax record corrected without having to file again or go through legal steps. Also, their refunds that were stuck will finally be paid. This is very helpful for people like pensioners, salaried workers, or small businesses who were waiting for that money to help with their regular expenses.
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It also helps in fixing a person’s tax history, so they won’t get wrongly marked as someone who didn’t file taxes. That avoids future penalties or interest charges. Sometimes, unprocessed returns also lead to mistakes in credit mismatch or TDS claims not being accepted, and this correction will help avoid all that.
Better Tax System
In the past few years the income tax system in India has been trying to go fully online, but system errors have made many people upset. Taxpayers got their returns rejected for no fault of theirs, and many didn’t know what went wrong. But now the they are trying to reform the process.
