ITR not processed, income tax refund pending? I-T dept can legally take till end of 2025 to process it The income tax laws mandate the deadline by which the income tax department must process the tax return. Read on to know the due date for the same
Taxpayers have to file their income tax returns (ITR) and wait for the income tax department to process these to know if they have to pay more tax or they will get an income tax refund. This is because only after processing an ITR will the tax department inform the taxpayer whether he/she has to pay additional income tax or a tax refund (if a claim has been filed) is due to him/her or if the tax calculations have been accepted without any refund or claim for additional tax.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} If you have filed an ITR during July and are awaiting an income tax refund, it's important to know how long the income tax department can legally take to process the tax return.
Sujit Bangar, a former Indian Revenue Service officer and founder of TaxBuddy.com, says, "Income tax laws allow the income tax department to process the ITR within 9 months from the end of the assessment year for which the ITR was filed. This means that for an individual who has filed an ITR for FY 2023-24 (AY 2024-25), the income tax department has time till December 31, 2025, to process it. Only when the ITR is processed can the income tax refund (if any) be paid to you."
This deadline applies to belated ITRs as well, he explains. "If an individual has missed the ITR filing due date of July 31, 2024, for FY 2023-24 (AY 2024-25), he can file a belated ITR on or before December 31, 2024. The belated ITR will be processed on or before December 31, 2025," he says.
Also Read: Govt is likely to earn this much from penalty of filing ITR
Interest on income tax refunds
A taxpayer is eligible to receive interest on the income tax refund. However, this interest is paid only if the refund amount is more than 10% of the actual tax liability.Bangar explains this with an example: Suppose an individual pays Rs 20,000 as tax when his actual tax liability is Rs 15,000, the taxpayer is entitled to an income tax refund of Rs 5,000. The refund amount will be paid back with interest. This is because the income tax refund of Rs 5,000 is more than 10% of the actual tax liability of Rs 15,000 (10% of Rs 15,000 = Rs 1,500).
Income tax rules mandate an interest of 0.5% per month on income tax refunds. The interest is calculated using a simple interest formula. Bangar says, "The interest on income tax refund will be calculated from April 1 till the date of tax refund, provided the ITR is filed on or before the due date of July 31. If a belated ITR is filed, then interest on an income tax refund is payable from the date of filing the belated ITR till the tax refund is issued."
So if the ITR was filed on July 1, 2024, and processed on October 31, 2024, the tax department will pay you interest on the income tax refund due from April 2024 to October 31, 2024, i.e. for seven months.
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This story originally appeared on: India Times - Author:Faqs of Insurances
