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Expect Tax Refunds Now In 10 Days

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By Shrimi Choudhary

Almost all verification and assessments of returns selected for scrutiny are being done electronically through an anonymous back office, manned by tax experts and officials, without any personal interface between taxpayers and officers.

The revenue department is working on a mechanism to cut the average period of processing and issuing tax refunds to 10 days from 16 days now.

The new timeline is expected to be enforced this financial year.

“In 2022-2023, the average time taken for processing tax returns was 16-17 days. It was 26 days in the preceding year, 2021-2022. Now we are looking at processing tax returns in 10 days and issuing refunds simultaneously,” a government official told Standard.

So far, refunds of Rs 72,215 crore (Rs 722.15 billion) have been issued from April 1 to August 21.

This includes Rs 37,775 crore (Rs 377.75 billion) to companies and Rs 34,406 crore (Rs 344.06 billion) to individuals. Direct tax collection, net of refunds, stood at Rs 5.88 trillion.

The gross collection of direct taxes, which includes both personal income tax and corporation tax, stood at Rs 6.6 trillion.

The revenue department is counting on advancement and a robust system that is ensuring faster processing of tax returns.

In the previous financial year, there was a significant increase in the percentage of tax returns.

Looking at 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.

Almost all verification and assessments of returns selected for scrutiny are being done electronically through an anonymous back office, manned by tax experts and officials, without any personal interface between taxpayers and officers, the official said.

The department is of the view that processing returns and refunds should be done simultaneously.

 

“We try to release refunds as soon as tax returns are processed. This is against the earlier practice of holding refunds of corporations to shore up revenue collection,” the official added.

The department is aiming to upgrade the system further in a manner that taxpayers can receive refunds in 24 hours.

“The aim is ambitious, but not impossible. We have issued refunds in three-four working days for at least 10 per cent of the returns filed and are sure this would become the norm within a few years,” the official cited above said.

Even rectification requests have been reduced to 0.1 per cent of the returns processed and the average time of rectification disposal has been reduced to nine days. Refunds are disbursed after the returns are processed.

For swift refunds, pre-validation of bank accounts is prudent. Taxpayers must do e-verification within 30 days of filing returns.

By July 31, the deadline for filing tax returns for assessment year 2023-24, over 67.7 million returns were filed. That is 16 per cent higher than the returns filed in the same period a year ago.

Northlines
Northlines
The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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