As the deadline for filing the income tax returns for assessment year 2024-25 nears, it would be relevant to determine the time it typically takes to process them and issue refunds, where applicable
The Income-tax Act, 1961 sets a maximum time limit for processing income tax returns (ITRs) filed by taxpayers. According to Section 143(1) of the Act, an intimation of the ITR processing must be sent within nine months from the end of the financial year the ITR was filed.
Says Rahul Singh, senior manager, tax and corporate advisor, Taxmann: “For instance, if an ITR is filed on July 10, 2024, the income tax department has until December 31, 2025, to process it, which is nine months from the end of the financial year 2024-25. However, the department has been processing ITRs much faster than the maximum time limit provided under the law. There have been instances where ITRs are processed within a day.”
What To Do If ITR Is Not Processed: If the ITR is not processed within nine months from the end of the financial year in which it was filed, the assessee can raise a grievance on the e-filing portal.
Why Does ITR Processing Take Time: According to Singh, the time required to process an ITR depends on various factors, such as the form in which the return is filed, the status of the assessee, and so on.
“Returns filed using ITR-1 are more likely to be processed quickly than those filed using ITR-3, as ITR-3 is more complex and detailed. Complex and detailed returns need more time for processing,” he says.
Once your ITR is processed, you may receive one of the following notifications.
(a) ITR Processed With No Payment Due: This indicates that the department has accepted your return, and there is neither a tax refund due to you nor any tax payable by you.
(b) Refund Issued: This indicates that the department has accepted your return and determined that a refund can be paid to you.
(c) Refund Adjusted Against Outstanding Demands: This indicates that your ITR refund claim has been adjusted against any pending tax demands from previous years.
(d) Additional Tax Demand Due To Discrepancies: This implies that discrepancies or mismatches in your ITR resulted in an additional tax demand. Possible reasons could be not including income reflected in the annual information statement (AIS) or the department denying credit for any tax deducted at source and/or tax collected at source (TDS/TCS).
(e) ITR Is defective: You may receive an intimation that states that the ITR you filed is defective under Section 139(9). It could be due to several reasons, say, for instance, the taxpayer may have used an incorrect ITR form.