Important Points for Faster Processing of Income Tax Refunds

Every Indian Taxpayer contributes to the well-being of the nation by allowing the outflow of some money from their personal account in the form of Tax. The Centralised Processing Centre (CPC) governed by the Income Tax Department is responsible for verifying the documents and processing them for the claimed tax refunds.

There is no way to escape the tax department’s radar, as it has its own set of determiners to check out whether the compliance is correct or not. If everything goes well, the tax refund is processed within a week of filing the return. CBDT has said that they have released refunds with a value of 4,60,024 crores.

CBDT also said that for the benefit of taxpayers, CBDT will send a reminder mail, and the taxpayer will have to confirm the mail within 7 days so that the refund will be processed accordingly. CBDT will send this reminder so that the taxpayer can confirm their bank account details.

Authorities possess a solid database of taxpayers’ information such as their bank interest details, tax withholdings by the employer, capital gains, dividends, etc. The major cause of delay in tax processing is the mismatch of information provided by the taxpayer when compared with the data available to the authorities. The data will further go through scrutiny to gain satisfactory results.

Best Tips for Faster Processing of Tax Refunds

Here, we described the top points for faster processing of income tax refunds.

Be Careful with the Preparation of Tax Returns

Attention, salaried individuals make sure that the return includes salary information mentioned in Form 16 (from the current as well as previous employers) and should match the salary information in Form 26A available on the tax department website. ITRs come with pre-filled details such as your salary and interest on fixed deposits/NRO savings bank details, and so on. Make sure that no tampering is done with the already filled information and nothing important is missed out from your side. Mismatches will attract notices from CPC and delay processing of the refunds.

The Refund Amount will be Directed to an Active Bank Account

Income Tax Return facilitates the feature of adding multiple bank accounts for refund credits. However, the refund will only be credited to the account validated by CPC. Well, it is better to select only one bank account for a refund and ensure that the account is active.

Prior Bank Account Validation for Direct Credit Refunds

Traditionally, refunds beyond Rs. 50,000 were compensated by means of cheque payments. From 1st March 2019, only a pre-validated bank account will receive e-refunds. Therefore, it needs a pre-verification of your bank account.

• Sign in to the e-filing portal
• From the profile settings dropdown, select ‘Pre-validate your Bank Account’
• Mention the details asked, such as Bank Account Number, Account Type, IFSC code, Mobile number, email, etc.
• The status of the request will be sent to your registered email ID.
• It is mandatory to note that your pre-validation process is complete before a refund is expected.

Electronic Verification of ITR; Form ITR V

After filing the return, the time limit of 30 days is assigned to deliver the self-attested copy of ITRV to the CPC department. The ITR will not be processed by CPC until ITR V is submitted to the CPC department.

E-verification is possible using the below-mentioned utilities:

• Aadhaar OTP
• Electronic verification code by logging to e-filing through Net Banking
• Digital Signature Certificate

Track the Status of Tax Refunds via Tax Portal

Once the ITR is processed, the department will send you an intimation U/s 143(1) on your email ID. If the department seeks more information or your ITR is picked for a tax audit (as per the situation demands), then you will receive a notice from the tax department.

The tax portal facilitates its taxpayers with the feature of tracking the status of income tax refunds. You can do so by:

• Logging into the IT e-filing website.
• Clicking on the ‘My Accounts’ tab and selecting Refund/Demand Status

Another way to track the status of a refund is by visiting: https://tin.tin.proteantech.in/oltas/refund-status.html

Documents required for checking the status of the refund are PAN and Assessment Year information.

What is the Reason for the Exception in the Refund Status for Various People?

The income tax returns are to be furnished not only on the grounds of the date but also to your income and refund amount. “They are processing the returns in batches, even going by the type of income tax return forms. First, the ITR 1 and 2 are processed. Also, if the taxpayer has multiple sources of income, it takes time to process returns.”

Your return will be processed faster than those who are availing of the returns; this applies to those whose income is less and have no refund to avail.

“Nil refund returns are processed faster when compared with returns where refunds are sought. While returns with smaller amounts of refunds too might be processed faster, refunds above Rs 10 lakhs need to follow the internal risk management procedure of the income tax department.”

“For most of my clients, the refunds of higher amounts have not yet been processed. However, those demanding a refund up to Rs 10 lakhs have already been processed.”

The information submitted by you has been disguised from the details which are already held with them about you by the tax heads and are the reason that the IT returns seek time to process. The comparison is from the collection of the data miner Dr Suresh Surana, Founder, RSM India, says, “The processing of the income tax returns is done by the Centralised Processing Centre (CPC) Bengaluru. The data analytics confirms the details filed in the Income Tax Returns (ITRs) with the income-tax department database, and in case both are in conformity, the returns are processed.”

Inconsistent Information

There might be some due tax that you have not filed yet, or there can be some inconsistency in the data for the previous year. “The delay could also be due to discrepancies in the data given in the return filed and as per the income-tax database. In such instances, the case gets referred for scrutiny assessment and outstanding dues can take more than a year to get settled,”

On the grounds of the assessee, several taxes are received by numerous entities and then given to the government; deposition of the taxes might not proceed due to the lockdown. This might affect the process of furnishing your return.

“In some cases, the TDS has been deducted but has not been paid to the Government, and so there is a mismatch,” said Savla.

It is also important to cross-check your bank details in the return filing as the electronic deposit is now mandatory and there will be no cheque incoming for refunds.

Some alterations were being initiated in the income tax forms via tax filing duration to include some more information about tax savings investments done during the lockdown.

What Implementations Need to be done if the Taxpayer Refund gets Late?

Some steps are to be followed by you if you see that the refund payment or the process of tax returns gets delayed. “You can call the helpline number of the Centralised Processing Centre (CPC) in Bangalore and request it to expedite the return and refund processing,” commented Sheth. 1800 103 4455 (or) +91-80-46605200 are the numbers for assistance from the CPC Bangalore.

By doing so, if no positive results are obtained, then from your own tax account you can furnish the request for complaint. Surana said, “If there is a substantial delay, they may even prefer making an online application in the e-nivaran tab,”.

Keep monitoring the return status and utilise the tools to request your refunds.