Waiting on your ITR refund? Know reasons behind the delay
Many taxpayers in India are currently experiencing delays in receiving their income tax refunds, leading to frustration and confusion. As of September 5, a total of 7.52 crore refunds were filed for the current assessment year (AY 2024-25). Out of these, 7.38 crore returns were verified by taxpayers, with 6.50 crore returns being processed. This article explores the reasons behind the delays and offers guidance for taxpayers waiting on their refunds.
Tax department's new approach to defective returns
A senior tax official recently revealed that the department is issuing 'defective income tax return' notices this year. These notices are sent when the assessing I-T officer believes that the return of income furnished by the taxpayer is incorrect. The notice provides a timeframe of 15 days from the date of intimation to rectify any errors, which can be extended further upon request by the taxpayer.
Consequences of unrectified defective returns
If the defect in the return is not rectified within the given timeframe or extended period, the return filed will be treated as 'Invalid.' This could lead to consequences similar to those of 'return not filed.' However, taxpayers can still rectify it on or before the completion of the assessment, subject to their delay application being approved by tax authorities.
Tax department seeks reconfirmation of refund claims
The tax department has identified a large number of returns under its risk management process and is seeking a reconfirmation of the refund sought, deductions made, or omissions from taxpayers. In response, taxpayers can either reiterate that their claim of refund is correct to the best of their knowledge and belief or file a revised return correcting the refund claim. This can be done by logging into the income tax e-filing portal and making the declaration under Pending Actions >Worklist.
Other reasons for delayed tax refunds
General reasons for delays in processing returns and tax refunds include ensuring compliance and accuracy. The department may seek more details from taxpayers or point out mismatched calculations. It could also be a case of incorrect bank details or failure to validate at least one bank account for refund purposes. Discrepancies in Form 26AS and complexities associated with ITR Forms 2 and 3 compared to ITR Forms 1 and 4, are other potential factors causing delays.
