Faceless Assessment : CBDT Rules (October 2025) Are Speeding Up ITR Corrections

he launch of India’s Faceless Assessment scheme was a landmark reform, promising to eliminate corruption, remove personal bias, and create a transparent, digital-first tax ecosystem. But for millions of taxpayers, this new system introduced a critical new frustration. There’s no feeling quite like the mix of relief and anxiety when you file your Income Tax Return. The relief comes from getting a major task done. The anxiety? It’s the “what if” – what if there’s a mistake?

For many, that “what if” became a frustrating reality. You diligently filed your return, double-checked your Form 26AS, and yet, the intimation under Section 143(1) arrives with a glaring error. Maybe the system didn’t give you credit for your TDS. Maybe it miscalculated interest. You knew it was a simple, “apparent” mistake.

But getting it fixed was anything but simple.

This was the great paradox of the original Faceless Assessment Scheme. A system designed to be efficient often became a black hole for rectification requests. Taxpayers and CAs alike found themselves lodging applications online, only to end up chasing their jurisdictional Assessing Officer (JAO) in a process that was anything but faceless.

Until now.

In October 2025, the Central Board of Direct Taxes (CBDT) quietly released a notification that fundamentally rewires the entire process. This isn’t just a minor update; it’s a paradigm shift. This, ladies and gentlemen, is Faceless Assessment 2.0.

This new framework, kicked off by Notification No. 155/2025 (dated October 27, 2025), is the government’s direct answer to the #1 complaint about the faceless system. It’s designed to do one thing: speed up ITR corrections and get your hard-earned money back in your bank account, faster than ever.

In this ultimate guide, we will break down exactly what these new rules are, why they were desperately needed, and how you can use them to your advantage. We’ll explore the old frustrations, the new game-changing solution, and provide a step-by-step guide to navigating this new, faster world of ITR rectifications.

The “Old” Headache: Why ITR Corrections Were a Nightmare (Faceless 1.0)

To appreciate the revolution, we must first understand the frustration. The Faceless Assessment Scheme, introduced under Section 144B of the Income Tax Act, was a landmark reform. Its intent was noble: to eliminate corruption, remove personal bias, and create a transparent, digital-first tax ecosystem. And in many ways, it succeeded.

But it had an Achilles’ heel: rectifications.

The Promise of Faceless Assessment (Version 1.0)

The original scheme, often called “Faceless 1.0,” was built on a “team-based” assessment model.

• No Human Interface: You would no longer meet a specific Assessing Officer.
• Automated Allocation: Your case would be assigned to a random Assessment Unit (AU) anywhere in India.
• Specialized Units: There were separate Verification Units (VU), Technical Units (TU), and Review Units (RU).
• Digital Communication: All notices and responses were handled exclusively through the e-filing portal.

The goal was to have an assembly line of specialists handle your case, ensuring objectivity. But what happens when that assembly line makes a small, obvious mistake?

The “Apparent” Problem with Mistakes “Apparent from Record”

The legal provision for fixing these errors is Section 154: Rectification of mistake apparent from the record.

A “mistake apparent from the record” is not a debatable point of law. It’s an obvious, factual, or clerical error.

• An arithmetic error in calculating tax.
• A failure to give credit for TDS that is clearly visible in Form 26AS.
• A failure to consider advance tax paid.
• A simple data entry error, like wrong gender or tax status.

You, the taxpayer, could file a rectification request online under Section 154. The law even states that the department should dispose of such an application within six months from the end of the month in which it was received.

For taxpayers, “six months” already seemed like an eternity for an “obvious” mistake. But the reality was often far worse.

The Great Bottleneck: Where the System Broke Down

The faceless assessment process was centralized at the National Faceless Assessment Centre (NFAC). But the faceless rectification process fell into a jurisdictional black hole. Here’s what would happen:

The Jurisdictional Black Hole

You file your rectification request on the portal. The faceless system (NFAC) flags it. But in many cases, the power to actually pass the rectification order still rested with your local, jurisdictional Assessing Officer (JAO) – the very person the faceless scheme was supposed to remove you from.

The problem?

1. The JAO was out of the loop. They weren’t involved in the faceless assessment that created the error.
2. The JAO had no context. They would receive a digital file from NFAC and have to start from scratch, often leading to more delays.
3. The JAO was still the one to chase. Tax consultants reported that despite the “faceless” portal, the only way to get a rectification moving was to physically visit or call the local JAO, defeating the entire purpose of the scheme.

This created a “broken bridge” between the centralized processing that found the error (the CPC in Bengaluru) and the decentralized officer supposed to fix it.

Portal Pains and “Lost” Applications

Taxpayers would file their rectification application and… silence. The portal would show “Submitted,” but there was no real-time tracking. Was it with the NFAC? Was it with the JAO? Was it lost in the digital ether? This lack of responsiveness was a major source of anxiety.

The Human Touch Paradox

The system was so “faceless” that it became “headless.” There was no single officer you could write to or speak with to explain a simple issue. A “mistake apparent from the record” is only “apparent” if a human is looking at it with common sense. Algorithms, in Faceless 1.0, were excellent at finding discrepancies but terrible at resolving them with context.

This entire framework was crying out for a solution. It needed to be as centralized and efficient in its correction as it was in its processing.

And that is exactly what the CBDT delivered in October 2025.

BREAKING: The October 2025 CBDT Rules – The Birth of Faceless Assessment 2.0

On October 27, 2025, the CBDT issued Notification No. 155/2025. This document, which might look like boring bureaucratic text, is the most significant upgrade to the faceless ecosystem since its inception.

It is, in effect, the launch of Faceless Assessment 2.0.

The Game-Changer: Notification No. 155/2025 Explained

So, what does this notification actually do?

In simple English: It gives the “computer” in Bengaluru the power to fix its own mistakes.

Let’s break that down.

1. Who is the “Computer”? The Centralised Processing Centre (CPC), Bengaluru. This is the technology-driven hub that processes millions of ITRs and issues those initial, automated intimations under Section 143(1).
2. What Power Does It Now Have? The notification grants “concurrent powers” under Section 154 to the Commissioner of Income Tax (CPC).
3. What Does “Concurrent Power” Mean? It means the CPC now has the same power as your local Assessing Officer to pass a rectification order.

This is the crucial change.

Before this rule, the CPC would process your ITR and find a “mistake” (e.g., TDS mismatch). It would issue a demand. If you filed a rectification, the CPC’s job was done. The case file would then have to be sent to your local JAO for the actual fix.

Now, the CPC is a one-stop-shop. It can process the ITR, and if an error is found, it can also process the rectification for that error.

Why This Is “Faceless Assessment 2.0” for Corrections

This change is profound because it realigns the entire system based on logic and efficiency.

Centralization of Power (The Right Way)

The biggest flaw of Faceless 1.0 was this hybrid, broken model. The assessment was centralized, but the correction was decentralized. It was a recipe for chaos.

Faceless 2.0, powered by this new rule, makes the correction process itself faceless and centralized. Your rectification request no longer goes on a cross-country tour to your local AO’s desk. It stays within the high-tech, data-driven environment of the CPC in Bengaluru, which is the unit best-equipped to handle it.

Bridging the Gap: Processing and Rectification United

As one tax expert noted, this move “bridges the gap between assessment and processing.” The same system that has all your ITR data, all your Form 26AS data, and all your challan data is now the system that handles your correction request.

It’s like calling customer service and getting your problem solved by the first person you talk to, instead of being transferred to five different departments that all ask for your name and-PIN again.

Eliminating the “Man-in-the-Middle”

This move effectively removes the local JAO as a bottleneck for CPC-driven rectifications. This frees up the JAOs to focus on complex scrutiny cases, while allowing the CPC to do what it does best: process high volumes of data-driven requests quickly.

What Specific Errors Can Now Be Fixed Faster?

This new, supercharged CPC rectification process is ideal for “mistakes apparent from the record.” The most common taxpayer grievances that will see immediate resolution include:

• TDS Credit Mismatch: The #1 taxpayer complaint. You claimed TDS of ₹50,000 (as per your Form 26AS/AIS), but the intimation only gave you credit for ₹40,000. Under the new system, filing a rectification for this should be incredibly fast, as the CPC can digitally verify your 26AS data in seconds.
• Non-Consideration of Prepaid Taxes: You paid Advance Tax or Self-Assessment Tax, but the intimation failed to account for it, resulting in a false demand and interest. The CPC can now verify its own challan records and rectify this instantly.
• Computational Errors: Simple arithmetic mistakes in calculating your total income or the tax liability on it.
• Incorrect Interest Calculation: The system incorrectly charged you interest under Section 234A (delay in filing), 234B (shortfall in advance tax), or 234C (deferment of advance tax).
• Incorrect Interest Paid: The system miscalculated the interest you are owed on your refund under Section 244A.
• Obvious Data Errors: Mistakes in gender, senior citizen status, or tax status (e.g., you were taxed as a resident but are an NRI, and the data supports this).

For any taxpayer who has ever had a refund held up for months due to one of these simple errors, this new rule is a massive, welcome change.

The Bigger Picture: Aligning with the New Income Tax Act, 2025

This October 2025 notification didn’t happen in a vacuum. It’s a critical part of a much larger, more ambitious project: the complete overhaul of India’s direct tax system, culminating in the new Income Tax Act, 2025.

A New Tax “Bible” for a Digital India

In August 2025, the Indian Parliament passed the new Income Tax Act, 2025, which is set to become effective from April 1, 2026. This new Act is not just an amendment; it’s a complete replacement of the old, archaic 1961 law.

The core philosophy of this new Act is built on three pillars:

1. Simplification: Using clearer language, removing obsolete provisions, and making the law easier to understand.
2. Digital Integration: Building the law from the ground up with the assumption that all processes will be digital and faceless.
3. Taxpayer-Centric Approach: Reducing litigation, improving transparency, and making compliance a less painful experience.

From “Assessment Year” to “Tax Year”: A Mindset Shift

A perfect example of this simplification is the new Act’s abolition of the confusing “Assessment Year” and “Previous Year” terminology. From 2026, there will only be one, simple term: “Tax Year.” The Tax Year (e.g., TY 2026-27) is the year in which income is earned and in which it is assessed. This single change removes a massive layer of confusion for the average person.

How Faceless 2.0 is the “First Step” of the New Act

The new Income Tax Act, 2025, provides the legal philosophy. But the systems to execute that philosophy must be built.

The CBDT’s October 2025 rules are the “first step” – the first major administrative action that puts the spirit of the new Act into practice.

The new Act wants a simple, digital, non-litigious system. The old, broken rectification process was the opposite of that. It was complex, analog (requiring offline chasing), and led to needless litigation.

By empowering the CPC with Notification 155/2025, the CBDT is signaling that the future of tax administration is:

• System-Driven: The system that finds the error is the system that fixes it.
• Data-Reliant: If the data (26AS, challans) is correct, the fix is automatic.
• Fast: It’s built for speed, not for sitting in a file on someone’s desk.

This “Faceless 2.0” for rectifications is the new operational model. It’s the engine being built to power the new, simplified chassis of the Income Tax Act, 2025.

The New Step-by-Step Guide: How to File for a Speedy Rectification (Post-October 2025)

The new rules are in place. The system is supercharged. Now, how do you use it?

Filing a rectification request correctly has become more important than ever. In the new system, you’re not trying to convince a local officer; you’re trying to give the centralized system the correct “trigger” to fix your problem.

Choosing the right option is key.

CRITICAL: Before You File – Rectification vs. Revised Return

First, you must understand the tool you are about to use. You cannot use a rectification (Section 154) to change your income, claim a new deduction you forgot, or make a fundamental change to your return.

• File a RECTIFICATION (Section 154) for:
  • Mistakes made by the CPC in its order.
  • TDS/TCS credit mismatch.
  • Advance Tax/Self-Assessment Tax paid but not credited.
  • Arithmetic errors in the CPC’s calculation.
  • Obvious factual errors (wrong gender, wrong tax rate applied).
  • The Golden Rule: You are correcting the order passed by the tax department.
• File a REVISED RETURN (Section 139(5)) for:
  • Mistakes you made when filing the original ITR.
  • Forgetting to claim a deduction (e.g., Section 80C, 80D).
  • Forgetting to report some income (e.g., interest income).
  • Changing bank account details or personal information.
  • The Golden Rule: You are correcting your original return and replacing it with a new, correct one.

You can only file a Revised Return before the end of the relevant Assessment Year (or before assessment completion). You can file a Rectification request up to four years from the end of the financial year in which the order you want to correct was passed.

For this guide, we are focusing only on Rectification (Section 154).

The Digital Process: Filing a Rectification on the e-Filing Portal

Here is the step-by-step process. Following this carefully will maximize your chances of a speedy, automated resolution under the new “Faceless 2.0” rules.

Step 1: Log in and Navigate

• Log in to the Income Tax e-filing portal (incometax.gov.in).
• On your dashboard, go to the ‘Services’ menu.
• Click on ‘Rectification’.

Step 2: Start a New Request

• You will see a history of your past rectification requests (if any).
• Click the ‘+ New Request’ button.

Step 3: Select the Order to be Rectified

• The system will ask you to select the ‘Income Tax’ option.
• From the dropdown, select the Assessment Year (AY) for which you want to file the rectification. (Note: This will soon be “Tax Year”).
• Click ‘Continue’.

Step 4: Select the Order/Intimation

• The system will show you the orders passed for that AY. For most people, this will be the ‘Intimation u/s 143(1)’.
• Select the order that contains the mistake.

Step 5: THE CRITICAL CHOICE – Select ‘Request Type’

This is the most important step. Your choice here directs your request to the right automated workflow.

You will see three main options. Here’s what they mean in the new “Faceless 2.0” context:

Option 1: ‘Reprocess the Return’

• What it is: This is the most powerful and (now) fastest option. You are not changing any data. You are simply telling the CPC, “Your first calculation was wrong. Please run the numbers again.”
• When to use it:
  • This is the GO-TO option for TDS/TCS mismatches.
  • Use it when your Form 26AS/AIS was correct, your ITR was correct, but the intimation still didn’t give you the credit.
  • Use it for prepaid tax (Advance Tax, Self-Assessment) that was paid on time but not credited.
• Why it’s faster now: Thanks to Notification 155/2025, the empowered CPC can immediately re-process, check its own data, and issue a new, corrected order u/s 154. This is the “superhighway” lane.

Option 2: ‘Tax Credit Mismatch Correction’

• What it is: This is a dedicated, specific workflow just for tax credit issues. It allows you to select the specific TDS/TCS/Prepaid Tax entries that were mismatched and provide the correct details.
• When to use it: If ‘Reprocess the Return’ fails, or if the mismatch is complex and you need to point the system to specific challan numbers or TAN details that you might have entered incorrectly in your ITR.
• Note: This is also now handled centrally by the CPC and will be much faster.

Option 3: ‘Return Data Correction (Offline/JSON)’

• What it is: This option is for when you made a mistake in your original ITR that you need to correct. You have to download the ITR utility, make the corrections, generate a new JSON file, and upload it.
• When to use it:
  • You entered the wrong challan number for your self-assessment tax.
  • You entered the wrong proportion of income between you and a co-owner of a house property.
  • The mistake is your data, not the CPC’s processing.
• Caution: This is a fine line. If you are changing data that increases your income or changes your deductions, the system might reject it and ask you to file a Revised Return (if the deadline hasn’t passed). This option is for correcting factual data within the return that led to the incorrect order.

Step 6: Submit and E-Verify

• After selecting your request type and providing the necessary details (e.g., selecting the schedules you want to correct for Option 3), you must submit the request.
• Like all other tax filings, your rectification request is not complete until you e-verify it.
• You can e-verify using Aadhaar OTP, your bank account, or a demat account.

What Happens Next (The “2.0” Difference)

This is where the magic happens.

• Old Way (Faceless 1.0): Your request would be submitted. It would then be routed from the CPC to the NFAC. NFAC would then (eventually) forward it to your local JAO. Your JAO, buried in other work, would let it sit. You would wait six months, then start making phone calls.
• New Way (Faceless 2.0): Your request (especially if you chose ‘Reprocess the Return’) stays 100% within the CPC’s ecosystem. The new, empowered unit under the Commissioner (CPC) has the data, the request, and the power to pass a new order.

Expected Timeline: While the statutory limit remains six months, the entire purpose of this reform is to cut that time down. For simple, data-driven requests like TDS mismatches, the expectation is that resolutions will now happen in weeks or even days, not months.

A Chartered Accountant’s Perspective: What This Really Means

As a tax professional, I’ve spent countless hours on hold, drafting follow-up letters, and visiting tax offices for issues that should have been solved by a simple click. This October 2025 rule is not just a procedural change; it’s a breath of fresh air that will have massive real-world consequences.

For the Salaried Taxpayer

• The Benefit: Quicker Refunds. This is the bottom line. No more seeing your refund of ₹15,000 “stuck” for a year because of a ₹500 TDS mismatch. The anxiety of seeing an incorrect demand or a reduced refund will be short-lived. This builds trust in the system.

For the Small Business Owner & Freelancer

• The Benefit: Improved Cash Flow and Reduced Harassment. This is critical. Imagine you’re a freelancer who paid ₹2,00,000 in advance tax, but the CPC’s intimation missed it and raised a demand for ₹2,00,000 plus interest.
• In the old system, that incorrect demand would hang over your head. The department could even initiate recovery proceedings or freeze your bank account while your rectification request was in limbo.
• In the new system, you can file for ‘Reprocess the Return’, the CPC can verify its own challan data, and the demand can be nullified within days. This is a massive relief for businesses who run on tight cash flows.

For Tax Professionals (CAs, Consultants)

• The Benefit: A Huge Reduction in Administrative Burden. Our job is to advise on tax law, not to be follow-up agents. This rule change frees up thousands of professional hours.
• Instead of “following up” with 50 different AOs for 50 different clients, we can now trust a centralized, system-driven process. Our efforts shift from chasing to filing correctly.
• The New Challenge: The onus on us is now even greater to be technically precise. We must be experts at navigating the portal. We must know exactly which of the three rectification types to choose. In Faceless 2.0, a mistake in how you file the rectification will be the new bottleneck. Precision is the new currency.

Conclusion

The journey of India’s faceless tax regime has been a bumpy one. It was a grand vision that often stumbled on the rocks of on-the-ground reality. The broken rectification process was, by far, the system’s most glaring flaw – a deep contradiction to its promise of efficiency.

The CBDT’s October 2025 rules (Notification 155/2025) are not just a patch; they are a fundamental upgrade. This is the moment “Faceless Assessment” begins to mature, evolving from a rigid, algorithm-driven idea (Version 1.0) to a responsive, intelligent, and truly integrated system (Version 2.0).

By centralizing the power to rectify with the CPC, the government has fixed the “broken bridge” and created a single, streamlined highway for processing and correcting your ITR.

For the first time, the promise of a tax system that is fast, faceless, and fair feels within reach.

Your move? Review any outstanding intimations or orders you may have. If you spot a “mistake apparent from the record” that has cost you money, there has never been a better time to file that rectification request. The new system is online, empowered, and ready for you.

MANDATORY DISCLAIMER: This article is for informational and educational purposes only. The information provided is based on general tax principles and common digital nomad challenges up to 2025. Tax laws are complex, change frequently, and are highly specific to your individual circumstances (your nationality, income, family, and travel patterns). This article does not constitute legal or financial advice. Before making any financial decisions, you must consult with a qualified, cross-border tax professional who understands your specific situation.

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