How long does it take for the tax dept to process income tax return (ITR) Experts advise individuals not to fret over this as generally ITR-3 or ITRs with capital gains, others take a longer time to process than ITR-1
The income tax return (ITR) filing deadline for the financial year 2022-23 (assessment year 2023-24) was July 31, 2023. However, there are still many ITRs that have not yet been processed by the Income Tax Department. Further, people have been posting regularly on social media expressing their frustration with the delayed processing times. Since without a successfully processed ITR, income tax refund won’t get credited to the bank account of the ITR filer.According to the e-filing ITR website, more than 6.96 crore (6,96,40,407) ITRs have been filed as of September 4, 2023 10.54 am. However, 5.82 crore (5,82,58,037) ITRs have been processed.
By when does an ITR possibly get processed successfully?
Tax experts say that generally, processing of ITRs takes on an average of 15-45 days from the date of e-verification of ITR. For those who are using the offline verification method (ITR-V form), the time limits are longer.“Once an ITR gets processed, the same would be intimated to the individual by way of issuing Intimation under Section 143(1) of the Income Tax Act, 1961. The Income Tax Act provides that no intimation under section 143(1) can be issued after the expiry of 9 months from the end of the financial year in which the return of income is filed,” says Dr Suresh Surana, founder, RSM India, a tax consulting group. Hence, for ITR submitted for FY 2022-23 (AY 2023-24), the intimation notice will come on or before December 31, 2024.
So, the filed ITR has to be processed within nine months from the end of the financial year in which the ITR was submitted. If the ITR is not processed within this time period, the tax department has to flag the submitted ITR for further scrutiny, etc. It cannot happen that the ITR was filed but not processed, i.e., ITR cannot be stuck in limbo.
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What to do if ITR is not processed after long time
“In case a taxpayer’s ITR remains unprocessed even after waiting for a considerable time, he/she may raise a complaint on the “Grievance tab” of the income tax portal. Also, the taxpayer can reach out to the central processing centre (CPC) through their helpline numbers,” says Surana.Why does ITR processing take time?
There are several reasons why it takes a long time for an ITR to get processed. “The ITR processing time generally depends on several factors, such as the complexity of the ITR , the ITR form selected, amount of claims in the form of deductions / exemptions, whether such deductions / exemptions are already covered in Form 16, etc,” says Surana.One of the factors that majorly contribute to the delayed processing of ITR is the ITR form used.
According to chartered accountant Amit Gupta, MD, SAG Infotech, a tax software solutions company, “The processing times for different ITR forms can vary. Generally, simpler forms like ITR-1, which is used by individuals with straightforward income sources, tend to have quicker processing times compared to more complex forms like ITR-3, which is used by individuals and HUFs with business or professional income. The reason behind these variations is that ITR forms with more intricate financial details, such as business income or capital gains, often require more thorough verification by income tax authorities. This can result in longer processing times for such ITR forms.”
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What are the types of intimations that will be sent once an ITR is successfully processed?
Once the ITR is processed, the income tax department sends intimation notice under Section 143(1). An intimation notice can represent any of the following situations:Tax demand noticeIncome tax refund dueNeither tax demand nor refundIntimation for tax demand: While processing the ITR, the CPC validates the information as provided in the ITR with respect to the records as available with the income tax department (such as Form 26AS/ Annual Information Summary/ Tax Information Summary, SFT details, etc.)
“Intimation with tax demand is generally issued to the taxpayer where the revenue’s records are not in consensus with the ITR filed by the taxpayer, and therefore, an additional tax liability is arrived at. Apart from the same, the revenue would make adjustments for any arithmetical error, incorrect claims, disallowance of any loss or specified deductions claimed in case of belated returns, etc. The demand notice under section 143(1) would be determined post such aforementioned adjustments,” says Surana.
Intimation for tax refund: Such intimation with tax refund is issued where no discrepancy is found in the ITR filed by the taxpayer. It can also happen that a discrepancy is found by the income tax department, then tax refund would be issued by them accordingly.
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No Demand or Refund Case: Such Intimation is received when the individual is neither required to pay any tax nor eligible for any refund. Such intimation is generally received by the individual where the income tax department accepts the ITR without making any additional adjustments or where any such adjustments do not impact the additional tax liability.
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This story originally appeared on: India Times - Author:Faqs of Insurances
