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Facing ITR Refund Delays? Income Tax Department Encounters Challenges Processing Refunds in These Two Categories

In a concerted effort to streamline its operations and enhance taxpayer services, the Income Tax Department reaffirmed its dedication to expeditiously processing Income Tax Returns (ITR). In the ongoing assessment year 2023-24, a total of 6.98 crore ITRs have been submitted, with an impressive 6.84 crore ITRs already verified and processed by the department.

According to the Central Board of Direct Taxes (CBDT), the apex body overseeing taxation matters, more than 6 crore ITRs have been efficiently processed in line with the department’s commitment to provide seamless services to taxpayers. Highlighting its remarkable progress, the department revealed that it has already disbursed over 2.45 crore refunds for the assessment year 2023-24, underscoring its determination to expedite the financial dealings of taxpayers.

As part of ongoing efforts to improve efficiency, the CBDT reported a significant reduction in the average processing time for ITRs post-verification. For returns filed for the assessment year 2023-24, this processing time has been slashed to just 10 days. This substantial improvement stands in stark contrast to the 82 days it took for ITRs in AY 2019-20 and the 16 days for AY 2022-23, demonstrating the department’s unwavering commitment to providing a more efficient and responsive service.

However, despite these impressive strides, the Income Tax Department faces challenges in processing certain categories of ITRs. Specifically, the department is currently unable to process two distinct types of ITRs. 

The first category comprises ITRs where verification is pending. As of now, there are approximately 14 lakh ITRs for the assessment year 2023-24 that have been filed but not yet verified by the taxpayers. The second category encompasses ITRs for which the department has requested additional information from taxpayers and is awaiting their response. Currently, there are 12 lakh such ITRs, with the department eagerly anticipating the necessary data to move forward with processing.

Additionally, the Income Tax Department has identified cases in which refunds have been calculated but remain unissued. This is primarily due to taxpayers failing to validate their bank account details with the department. To address this, the department urges taxpayers to promptly validate their bank accounts through the e-filing portal, ensuring the swift and efficient disbursement of refunds.

From a tax expert’s perspective at Vakilsearch, we acknowledge the Income Tax Department’s efforts to expedite Income Tax Returns (ITR) processing and enhance the taxpayer experience. The reduction in average processing times and the issuance of over 2.45 crore refunds for the assessment year 2023-24 are noteworthy achievements. However, to streamline operations, we provide timely verification and response to department queries. Additionally, we simplify verification procedures, optimising information requests, encouraging bank account validation, and continuous technology upgrades which  can significantly enhance the efficiency and effectiveness of the ITR processing system, benefiting all the taxpayers.

Team Vakilsearch