What will happen to your pending income tax refunds from April 1, 2026?

As India prepares to retire its 65-year-old tax code on April 1, 2026, the Central Board of Direct Taxes (CBDT) has issued a reassuring clarification for taxpayers: your pending tax refunds are safe. The tax department issued a set of FAQs days before the implementation of the new Income Tax Act, 2025.

The transition from the Income-tax Act, 1961, to the new Income-tax Act, 2025, will not result in any loss of financial claims.

"Rights, benefits, obligations or liabilities that arose under the old Act continue to exist. Thus, if a taxpayer was entitled to claim a refund under the old Act for any tax year prior to the commencement of the new Act, he still remains entitled to that refund even after the new Act comes into force," CBDT said in the FAQs released on 23 March.

What is Income tax refund?

An income tax refund means a refund amount that is initiated by the tax department if the amount paid by taxpayers in taxes exceeds the actual amount due.

How much time does the refund take to be credited?

Refund processing by the tax department usually starts only after the return is e-verified by the taxpayer. As per the income tax department website, usually, it takes 4-5 weeks for the refund to be credited to the account of the taxpayer.

The new Income Tax Act, 2025, which replaces the six-decade-old law, will come into effect from April 1, 2026.