For the financial year 2025-26, the government extended the deadline for filing income tax returns (ITR) from July 31 to September 15, 2025. As people rush to file, many taxpayers have noticed that their refunds are coming in lower than expected.

The Reason Behind Lower Refunds

According to CA Aditi Bhardwaj, the issue stems from a technical glitch in the ITR filing software. She explained on social media platform X that under Section 288B of the Income Tax Act, 1961, refund amounts must be rounded off to the nearest multiple of ten rupees.

However, for ITR refunds of AY 2025-26, this rounding process is not happening. For example, a refund of Rs 35,807 should be rounded up to Rs 35,810 — but taxpayers are only receiving Rs 35,807.

A Systemic Glitch, Not a Policy Change

Tax experts point out that this discrepancy is purely technical. Abhishek Soni, co-founder of Tax2Win, warned that if the issue persists, it would mean a violation of Section 288B. While the difference for an individual taxpayer is minor, the aggregate shortfall could run into crores of rupees, leading to complaints, litigation, and extra administrative burden.

Experts emphasize that since this appears to be a system glitch rather than an intentional policy change, the Income Tax Department is expected to step in with a clarification and corrective action soon.