Good News! Income Tax Department To Cut Down Refund Time To Just 10 Days From This Year

Less than a month after the ITR filing deadline date of July 31 went by, India's income tax department seems to be making things quicker for taxpayers.

The revenue department is preparing to roll out a system to cut the average processing and issuance time for tax refunds from the current 16 days to just 10 days. More importantly, the new timeline is expected to be implemented during the current financial year 2023-24.

A further goal for the department is to ultimately reduce the time to just 24 hours after upgrading its system.

Income Tax Refund Time To Be Cut Down To Just 10 Days

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¡°In 2022-23, the average time taken for processing tax returns was 16-17 days. It was 26 days in the preceding year, 2021-22. Now we are looking at processing tax returns in 10 days and issuing refunds simultaneously,¡± the Business Standard quoted a government official as saying.

The technological advancement and the implementation of a robust system are facilitating quicker processing of all tax returns. In the previous fiscal year, there was a notable rise in the percentage of tax returns. Based on the current trends, this financial year, ¡°We are hoping to see a further jump in processing time to the extent that it could further shorten the timeline of the issuing refunds,¡± another official said.

"Aiming That Taxpayers Get Refunds Within 24 Hours"

The income-tax department has adopted an electronic approach for conducting verifications and assessments of tax returns, and the process is managed via an anonymous back office, staffed by tax experts and officials, with no direct personal interactions between taxpayers and officers. Another official reportedly said that the income tax department aims to release refunds as soon as tax returns are processed. This represents a departure from the previous practice of holding refunds of companies to bolster revenue collection.

The tax department is actively working on further upgrading the system with the goal of enabling taxpayers to get their refunds within 24 hours. At present, refunds have been processed within three to four working days for around 10% of the returns. Officials are confident that this rapid refund processing will become standard procedure within the next few years.

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Also Read: Watch Out For These Penalties If You Fail To File Your ITR By 31 July

More Than 6.77 Crore ITRs Filed Till July 31

¡°The total number of ITRs for AY 2023-24 filed till July 31, 2023, are more than 6.77 crore, which is 16.1% more than the total ITRs for AY 2022-23 (5.83 crore) filed till 31st July 2022,¡± the Ministry of Finance had said in a statement a day after the deadline had finished. Among these, 53.67 lakh ITRs from first-time filers indicated a widening of the tax base.

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