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Why is Income Tax Refunds Delayed in India? Overview | 2024

Why is Income Tax Refunds Delayed in India? Overview | 2024

Navigating the intricacies of income tax refunds can be a formidable task for many taxpayers. From comprehending eligibility criteria to resolving issues that may arise during the process, there's a lot to consider and understand.

In this overview by India Refunds, you’ll get to know - why is Income Tax Refunds delayed in India. We'll break down everything you need to know about income tax refunds, from eligibility requirements to troubleshooting common problems. 


Understanding Income Tax Refunds:

An income tax refund is the excess amount of tax paid by a taxpayer, which is refunded by the government after the processing of their income tax return (ITR). It represents the difference between the total tax paid and the actual tax liability for a given year.


Eligibility for Income Tax Refund:

To be eligible for ITR, the taxpayer's return must be processed by the Centralized Processing Centre (CPC) of the Income Tax Department. Refunds are typically issued within about four weeks after confirmation of eligibility during processing. You can also refer to this blog by India Refunds to know more about the average processing time for ITR


Factors Affecting Refund Processing:

Several factors can impact the processing of income tax refunds, to understand - why is Income Tax Refunds delayed in India, read the following:


1. Bank Account Verification:

  • Ensure that your bank account is pre-validated on the income tax e-filing portal.

  • The name on your bank account must match the details on your PAN card to avoid further complications.


2. E-verification of ITR:

  • E-verification of your income tax return is mandatory for processing.

  • Complete this process within 30 days of filing your return to avoid any delays.


3. Outstanding Dues:

  • Unresolved dues from previous fiscal years may result in the adjustment of refunds.

  • Notification about outstanding dues will be provided through an intimation notice.


4. Return Under Scrutiny:

  • Some returns may undergo scrutiny by the Income Tax Department for accuracy and compliance.

  • Refunds may be delayed until the assessment is complete.



5. Form 26AS Discrepancy:

  • Discrepancies between TDS details in the return and Form 26AS can delay refunds.

  • Ensure consistency and accuracy in reporting tax details.


Refer to this guide by India Refunds to understand the ITR Refund Reissue process.


Troubleshooting Refund Delays:

If your income tax refund is pending, follow these steps to address common issues:


1. Double-check account information:

  • Review bank account details provided during filing and ensure they are correct.

  • Confirm account validity and pre-validation on the income tax portal.

2. Contact the Income Tax Department:

  • Reach out to the Income Tax Department with essential details for refund re-issue.

  • Provide PAN, assessment year, and refund amount for prompt assistance.


Navigating the income tax refund process and understanding - why is Income Tax Refunds delayed in India, requires attention to detail and timely action. By knowing eligibility criteria, potential delays, and troubleshooting steps, taxpayers can expedite the refund process and ensure a smooth experience. Stay vigilant, keep records updated, and seek assistance from the Income Tax Department when needed to effectively manage income tax refunds.

Reach out to India Refunds, India’s first and only advisory firm dealing with issues related to tax refunds of Income Tax and GST, for all your refund requirements and other information.

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