CAs point to glitch in ITR software resulting in taxpayers getting a little less tax refund; what it means for you

Time of India

3 days ago

Aditi Bhardwaj
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'Any amount payable, and the amount of refund due, under the provisions of this Act shall be rounded off to the nearest multiple of ten rupees and for this purpose, any part of a rupee consisting of paise shall be ignored and thereafter if such amount is not a multiple of ten, then, if the last figure in that amount is five or more, the amount shall be increased to the next higher amount which is a multiple of ten and if the last figure is less than five, the amount shall be reduced to the next lower amount which is a multiple of ten.'
'Thus, in accordance with the provisions of Section 288B of the Income-tax Act, 1961, both the amount payable and the amount of refund due are required to be rounded off to the nearest multiple of ten rupees. The section specifically provides that where the amount contains a part of ten rupees, if such part is five rupees or more, it shall be rounded up to the next ten, and if it is less than five rupees, it shall be ignored. Accordingly, a refund amount of Rs. 35,807 ought to have been rounded off to Rs. 35,810.'
What might happen with taxpayers if this error persists?
Chartered Accountant Aditi Bhardwaj has pointed out a glitch in the computer system which processes filed and verified income tax returns (ITRs). The problem is that the tax refund amounts aren't being rounded off, resulting in small amounts being overlooked.On August 16, 2025, Bhardwaj said on X (formerly Twitter): 'As per Section 288B of the Income-tax Act, 1961, the amount of refund should be rounded off to the nearest multiple of ten rupees. However, it is observed that for ITR refunds of AY 2025-26, the final refund is not rounded off. For example, Rs 35,807 is not rounded to Rs 35,810. This appears to be happening across all cases. Request to clarify @IncomeTaxIndia. Example acknowledgment attached.'The photo below shows this error:Source: Aditi BhardwajWhile CAs have varying opinions, they all agree that Bhardwaj is correct.In reference to the query, yes, the understanding is correct that while filing the tax returns for AY 2025-26 , the final refund is not getting rounded off. However, given the quantum involved being very negligible, the same would hardly have any impact on the Taxpayers.'Yes, CA Aditi Bhardwaj is correct. Under Section 288B of the Income-tax Act, 1961, any tax payable or refundable must be rounded off to the nearest multiple of ₹10. This means that a refund of Rs 35,807 should actually be credited as Rs 35,810. However, as she has pointed out with live examples for AY 2025-26, many refunds are being issued without this rounding off—taxpayers are receiving the exact figure (Rs 35,807) instead of the legally rounded amount. While there has been no official statement from the Income Tax Department so far, early signs suggest this is likely a technical or system-level error rather than an intended change in procedure.'Also read: 16 transactions which tax dept gets to know via SFT returns; Report them now to avoid possible jail term for misreporting income 'Yes, the relevant provision is Section 288B of the Income-tax Act, 1961, which states:Also read: Wife gets tax notice for husband's Rs 6.75 crore Mumbai house purchase; Bombay High Court gives relief to wife Soni says that if this error continues, it would mean non-compliance with Section 288B of the Income-tax Act, 1961, as refunds must be rounded off to the nearest Rs 10.Soni adds: 'Though the difference per taxpayer is small, cumulatively it could run into crores, leading to grievances, additional administrative burden, and even litigation. Since it appears to be a system-level glitch rather than a policy change, the Income Tax Department is expected to clarify and correct it soon.'Surana says: 'This situation does not amount to an error on the part of taxpayers, nor does it create any adverse consequences for them.'Surana explains: 'As per Section 288B, the obligation to round off the amount payable or refundable lies with the processing system of the Income Tax Department. Even if the refund is reflected without rounding, it does not affect the taxpayer's substantive entitlement, as the provision itself ensures that the statutory amount due is rounded off to the nearest multiple of ten rupees. Accordingly, taxpayers are not required to take any corrective action, and any variation arises only as a matter of procedural implementation at the Department's end, not as a compliance lapse on the part of the assessee/ taxpayers.'