Personal Finance
Many of you who filed your income tax returns well in advance of the deadline may be wondering why you haven't received your refund yet. Although the Income Tax Department usually processes refunds in a set amount of time, there are a number of things that can go wrong with delays.
Updated : Aug 12, 2024, 07:45 PM IST
While many taxpayers who filed their returns at the last minute saw their returns processed faster and received their tax refunds promptly, some taxpayers who filed their tax returns much earlier are still waiting for their refunds. In certain cases, refunds were issued within 24 hours of filing, while in other cases, taxpayers have been waiting for the tax department to process their refunds for over a month. The Income Tax Department did not extend the Income Tax Return (ITR) deadline for the Assessment Year 2024–25. Despite calls from tax professionals and individual taxpayers to extend the timeline beyond July 31.
Many of you who filed your income tax returns well in advance of the deadline may be wondering why you haven't received your refund yet. Although the Income Tax Department usually processes refunds in a set amount of time, there are a number of things that can go wrong with delays. Some of the frustration may be reduced if you are aware of these explanations and the maximum amount of time the department is legally allowed to take to issue refunds.
The type of ITR form you have chosen to file your income tax returns on is one of the factors that contributes to delays in ITR processing. Akhil Chandna, Partner, Grant Thornton Bharat, said, “Simpler forms like ITR-1 or ITR-4 are usually processed faster compared to ITR-2 or ITR-3."
He further added, “Discrepancies in the data provided in the tax return, such as mismatches in reported income or tax credits may require re-verification by taxpayer post communication from the tax department." He said that by being aware of these elements, taxpayers can better prepare for any potential delays in receiving their refunds and manage their expectations.
The statutory timeline for processing of ITRs for AY 2024-25 is 31 December 2025. However, the speed at which tax returns are processed has increased due to recent technological advancements.
The taxpayer is entitled to interest at a rate of 0.5% per month, or part of a month, calculated from April 1, 2024, until the date of the refund, if their income-tax return is filed by the deadline. Interest is due from the time the ITR is provided until the refund date if the return is filed after the deadline. However, if the amount of the refund is less than 10% of the actual income tax liability, the Income Tax Department will not charge interest.