As of September 5, 2023, a total of 6.98 crore Income Tax Returns (ITRs) for the Assessment Year (AY) 2023-24 have been filed, with 6.84 crore of these ITRs successfully verified. This information was communicated by the Press Information Bureau (PIB) in a release dated the same day. The important aspect of this report is the considerable improvement in the processing time for these returns, especially when compared to previous fiscal years.
Average processing time of income tax return - India
In prior years, there were notable fluctuations in average processing time of income tax return. In the fiscal year 2019-20, it was notably protracted, spanning 82 days. Conversely, in the fiscal year 2022-23, this period was notably curtailed to 16 days, reflecting a favourable trend in the optimization of the process. However, the latest data for the fiscal year 2023-24, shows a significant reduction in the average processing time for income tax returns subsequent to their verification, now reduced to a mere 10 days.
The PIB release also provided additional insights into the status of ITR processing for AY 2023-24. It was noted that out of the 6.84 crore verified ITRs, more than 6 crore have already been successfully processed as of September 5, 2023. This signifies that over 88% of the verified ITRs have undergone processing, and more than 2.45 crore refunds for AY 2023-24 have been issued. This is indeed a commendable achievement in terms of delivering timely refunds to taxpayers.
However, it is important to acknowledge that the Income Tax Department still faces challenges in processing a portion of the ITRs. Some taxpayers have expressed frustration on social media platforms due to extended processing periods, as the release of income tax refunds depends on the successful processing of ITRs.
It is crucial to understand that the Department encounters difficulties in processing certain categories of ITRs due to incomplete information or actions on the part of taxpayers. These include:
Approximately 14 lakh ITRs for AY 2023-24, as of September 4, 2023, have been filed but are yet to be validated by taxpayers. Verification is a critical step, as processing can only commence once this step is completed. Taxpayers are encouraged tto expedite the verification process.
Around 12 lakh confirmed ITRs have been flagged for additional information, and information has been sent to taxpayers through their registered e-filing accounts. Prompt responses from taxpayers are essential to expedite the processing of these cases.
Moreover, there are instances where ITRs have been finalized, and refund amounts have been determined. Nevertheless, the Department cannot issue refunds because taxpayers have not verified the bank accounts where they wish to receive their refunds. The e-filing system mandates that taxpayers verify their bank account information to facilitate this crucial step.
Types of intimations that are sent once an ITR is successfully processed
Once an ITR is successfully processed, the Income Tax Department sends an intimation notice under Section 143(1). This notice can signify various scenarios, including:
A notice of tax demand.
Income tax refund due.
A notice indicating neither a tax demand nor a refund.
In conclusion, the latest data reflects significant improvements in the average processing time of income tax returns - in India for AY 2023-24. The reduction in average processing time to just 10 days is a notable achievement, and the Department's efforts to expedite processing and issue refunds promptly are commendable. However, taxpayers must also play their part by promptly verifying their returns and providing necessary information to ensure a smooth and efficient tax filing experience.