The income tax department’s website shows that as of 27 August, over 3.83 crore taxpayers had already filed their tax returns. Of these, 3.66 crore ITRs are verified, and over 2.43 crore verified ITRs have been processed.
A number of taxpayers who were waiting to receive a tax refund on their returns have received it.
Chirag Chauhan, a Mumbai-based chartered accountant, shared his story of receiving his tax refund within a week of filing his return. Thanking the I-T department, he wrote, “I received my income tax refund credit within seven days. This year’s refund process seems faster than last year.”
OP Yadav, Tax Evangelist, Prosperr.io and Former Principal Commissioner of Income Tax, explains that smaller refunds are generally credited 7-10 days after processing.
“Refunds are generally released once the Income Tax Return (ITR) is processed by the Centralised Processing Centre (CPC). However, smaller refund cases are usually processed much faster, and refunds are often credited within 7 to 10 days after processing. The timeline may vary depending on the extent of internal checks required,” Yadav says.
Reasons for refund delay
However, there are several occasions when tax refunds are delayed. If some taxpayers have not received a refund, there could be numerous reasons for this. For instance, there could be a mismatch between the details in the return filed and in the AIS or Form 26AS. Another reason could be a manual error made while filing return such as incorrect bank account information.
Avnish Arora, executive director, Direct Tax, Forvis Mazars (India), explains, “The Income Tax Department has made notable strides in speeding up refund processing, and as a result, several taxpayers now receive refunds within a month, and in some instances, refunds are issued just days after filing returns. However, delays still occur when returns are flagged for stricter scrutiny, if there are mismatches between the details in the filed return and records like the AIS or Form 26AS, or due to simple errors such as incorrect bank account information.”
While explaining the reasons for the delay, OP Yadav says it happens when the return is found to be defective under section 139(9) of the Income Tax Act.
It also happens when a notice is issued under section 245(1) proposing adjustment of the refund against outstanding tax demand, he adds.
“Delay in refund also happens when a notice is issued under proviso to section 143(1) of the Income Tax Act, proposing an adjustment to the returned income on account of arithmetical errors, incorrect claims apparent from the record, or inconsistencies with information in previous year returns- such as income disclosed is not conformity with credit of TDS claimed, HRA exemption claimed but TDS on rent has not been made,” Yadav pointed out.
It is worth mentioning that the law entitles taxpayers to an interest on late refunds under Section 244A, offering a measure of relief in the event of prolonged waiting.
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