CBDT Notifies New Rules Allowing CPC To Fix Refund And Tax Demand Mistakes: What It Means

The Central Board of Direct Taxes (CBDT) has issued a new rule giving more authority to the Commissioner of Income Tax (Centralized Processing Centre – CPC), Bengaluru. It allows the CPC to fix certain

types of mistakes in tax processing without needing approval from other offices, making it faster to issue new demand or refund notices.

The new rule became effective from October 27, 2025.

The CPC Bengaluru will be able to correct errors in tax orders – like calculation mistakes, missing prepaid tax credit, or refund errors. Moreover, in case corrections change the amount of tax payable or refundable, the CPC Bengaluru has the authority to issue new demand or refund notices.

Mistakes That Can Be Rectified

The mistakes that can be rectified are wrong tax/refund calculation, missed tax relief under any section, missed advance tax or TDS credit, and wrong interest calculation under Section 244A (Interest on Refunds).

“…directs that the Commissioner of Income-tax specified in column (2) of the Schedule hereto annexed, having his headquarter at the place specified in the corresponding entry in column (3) of the said schedule, shall exercise the concurrent powers: –

i. to rectify u/s 154 of the IT Act 1961, the mistakes which are apparent from records including any refund issued earlier under the provisions of the Act and/or non-consideration of any pre-paid tax credit and/or non-consideration of any relief eligible and/or calculation of interest u/s 244A of the IT Act 1961, in passing any order under the Income-tax Act resulting in error in computation of the Tax and/or refund
determined and/or demand;

ii. to issue notice of demand under section 156 of the Income-tax Act, 1961 in such cases covered under (a) above,” Ministry of Finance’s notification dated October 27, 2025.

CPC Can Delegate Powers

The Commissioner can delegate these powers in writing to:

Additional or Joint Commissioners of Income Tax.

They, in turn, can allow Assessing Officers to use these powers for specific cases.