The process of filing Income Tax Returns (ITR) is underway rapidly across the country. The deadline for filing ITR this year has been set for September 15, 2025. Consequently, many taxpayers are asking whether filing ITR early also leads to faster tax refunds.
Every year, lakhs of taxpayers wait until the last date and file their returns in the final days, leading to issues like technical glitches, data errors, and duplicate entries. According to tax experts, if a return is filed early with accurate information and documents, the processing and refund might be faster, but there is no guarantee.
Benefits of Filing Early
Vibhor Goyal, founder of the fintech company OneBank, believes that if ITR is filed in the early months like May or June with correct and complete data, it usually takes 2 to 4 weeks to process. He mentioned that submissions made at the last minute often get stuck in a long queue, which can delay processing.
He says that the Income Tax Department processes returns on a ‘first come, first served’ basis. In such cases, returns filed early are reviewed sooner, provided there are no errors or mismatches.
Factors Affecting the Refund Process
Vibhor Goyal also explained that filing on time is not enough. It is crucial that the return is filled accurately and matches completely to get a refund quickly. He gave an example that if an entry of interest income is missed in Form 26AS or there is a minor incorrect detail, the entire return might be sent for review. In such a situation, there could be a delay of 60 to 90 days.
He estimates that Indian taxpayers, employers, and chartered accountants incur an indirect loss of approximately 5000 to 7000 crore rupees annually due to matching errors and follow-ups.
Income Tax Department's Process
Shankar Kumar, CA and founder of EZ Compliance, says that the tax refund process completely depends on the department's verification method. He stated that there is no definite rule that can guarantee a faster refund by filing ITR early.
He explained that it often happens that someone files early, but their return gets stuck in the system for some reason, while someone else's return gets processed sooner despite being filed a few days later. Therefore, it entirely depends on the quality of filing and data matching.
More Time for Corrections
According to Niyati Shah, Head of Tax at 1 Finance, a major advantage of filing ITR early is that if there is any mismatch or error in the return, there is ample time to correct it. This can avoid the last-minute rush and hassle.
She also mentioned that the Income Tax Department usually verifies returns in the order they are filed. If the data in the return is completely correct and matches the TDS statement, Annual Information Statement, and Form 26AS, then a return filed early can indeed be processed faster.
Need for Digital Transformation in Tax System
Tax experts also acknowledged that India's tax system has technologically advanced significantly, but manual intervention is still required in data matching. If data in Form 16, 26AS, AIS, and other documents is completely autofilled, the chances of errors can be greatly reduced.
Additionally, if the information sent by banks and other financial institutions is updated on time, the return processing and refund process can be even faster.
Increased Awareness Regarding ITR Filing
In the last few years, awareness among taxpayers regarding ITR filing has increased. Reminders sent by the Income Tax Department, the availability of forms, and online facilities have made the process simpler than before. Now, most taxpayers file in online mode.
