Taxpayers whose total tax paid exceeds their actual income tax liability are generally eligible for a refund. However, complications can arise when the Income Tax Department adjusts refunds against past tax demands under Section 245 or when returns are processed late by the Centralised Processing Centre (CPC).
Chartered accountants are now drawing attention to a crucial cut-off date — December 31, 2025 — for taxpayers filing returns for Assessment Year (AY) 2025–26.
Why December 31, 2025 Matters
Under Section 139(5) of the Income-tax Act, taxpayers can file a revised Income Tax Return (ITR) only up to December 31, 2025. After this date, even if your original ITR is processed later and contains errors, you will not be allowed to revise it.
Chartered Accountant Himank Singla highlighted the issue on social media, noting that many ITRs filed on time are still pending processing. If such returns are processed after December 31, 2025 and errors are found, taxpayers will lose the option of filing a revised return.
As per official data, by December 16, 2025 (6:39 PM), around 7.68 crore ITRs had been processed out of 8.34 crore returns filed and verified, leaving a substantial number still awaiting processing.
What Happens If Errors Are Found After December 31, 2025?
Once the revision window closes, taxpayers have only limited remedies if the CPC processes their return later and flags mistakes.
According to Chartered Accountant Suresh Surana, a revised return cannot be filed after December 31, 2025, even if the ITR has not yet been processed. However, the law does provide alternative remedies depending on the nature of the issue.
Available Options After the Deadline
1. Rectification under Section 154
If the CPC issues an intimation under Section 143(1) highlighting an apparent mistake, taxpayers can file a rectification application under Section 154. This can be done online through the Income Tax e-Filing Portal.
Rectification is permitted only for errors apparent on record, such as:
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Arithmetical mistakes
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Incorrect tax or interest computation
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Mismatch of TDS credits
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Clerical or data entry errors
Rectification requests must generally be filed within four years from the end of the financial year in which the intimation is issued.
However, experts caution that rectification cannot be used to:
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Make fresh claims
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Introduce new deductions or income
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Address debatable or interpretative issues
If a rectification request is rejected, taxpayers may file an appeal against the rejection order.
2. Filing an Updated Return (ITR-U)
Another option available after December 31, 2025 is filing an Updated Return (ITR-U) under Section 139(8A). However, this route has significant limitations.
According to tax experts, an ITR-U:
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Cannot be used to claim a refund
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Cannot be a loss return
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Cannot reduce tax liability
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Can only be filed if it results in additional tax payable
Chartered Accountant Vishwas Panjiar explains that in many cases, legitimate refund claims may lapse if errors are discovered after the revision deadline and do not qualify for rectification.
Additional Tax Payable on ITR-U
Filing an updated return attracts additional tax, depending on how late it is filed:
| Time from end of AY | Additional Tax Payable |
|---|---|
| Within 12 months | 25% of tax + interest |
| Within 24 months | 50% of tax + interest |
| Within 36 months | 60% of tax + interest |
| Within 48 months | 70% of tax + interest |
What If the ITR Is Not Processed at All?
If your return remains unprocessed for an extended period, experts recommend proactive steps such as:
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Raising an online grievance through the e-Filing Portal or CPGRAMS
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Submitting a written follow-up request to the CPC
CPC’s Legal Time Limit for Processing Returns
The CPC has nine months from the end of the financial year in which the return is filed to process the ITR and issue an intimation under Section 143(1).
For example, if an ITR for AY 2025–26 is filed anytime during FY 2025–26 (including July 31, September 16, or December 31, 2025), the CPC has time until December 31, 2026 to process it.
If the CPC fails to process the return within this statutory period, it loses the authority to issue an intimation thereafter.
Key Takeaway for Taxpayers
Tax professionals advise taxpayers to thoroughly review their ITR before December 31, 2025, especially if refunds are involved. Once this deadline passes, the scope for corrections narrows significantly, and refund claims may be permanently lost in certain cases.
For AY 2025–26, timely review and corrective action could make the difference between receiving a refund and losing it altogether.
