Income Tax: Average Income Tax Refund Time Now Just 10 Days Due to Automation and Process Improvements
The most common concern for taxpayers after filing their income tax returns (ITR) is when they will receive their refund. The Income Tax Department has significantly automated technology and processes in recent years. As a result, the average time taken to issue refunds has now decreased to 10 days. However, experts believe that this is an average, and the time taken to receive a refund can vary from case to case.
What impact does extending the deadline have on refunds?
The last date for filing income tax returns for Assessment Year 2025-26 has been extended to September 15th. This has led many to wonder if this will also delay their refunds. However, the Income Tax Department has stated that extending the deadline has no direct correlation with the time of refunds. If taxpayers have filed their returns correctly and on time, they can receive their refunds quickly.
What is the timeframe for refunds as per the law?
According to the Income Tax Act, refunds can be issued within a few days of filing if the case is straightforward. However, if the case is complex or requires any kind of investigation, the department can issue the refund up to 9 months after the end of the assessment year. This means that if a taxpayer is filing a return for Assessment Year 2025-26, the final deadline for receiving the refund could be December 2026.
Common reasons for delay in refunds
- Failure to e-verify: Many taxpayers file their returns but forget to e-verify them. The Income Tax Department does not process the return and does not issue a refund without e-verification.
- PAN and Aadhaar not linked: If your PAN card is not linked to your Aadhaar number, the system may hinder the processing of your return. This is sure to delay the refund.
- Discrepancies in TDS information: If the TDS information given in your Form 26AS or AIS does not match the details given in the return, the system stops the return. This can cause a delay in the refund.
- Providing incorrect bank details: Refunds are transferred directly to your bank account. If you have provided an incorrect account number or IFSC code in the return, the transaction may fail.
- Ignoring department notices: Sometimes, the department requests some information through email or notice. If the taxpayer does not respond to it on time, the refund may be withheld or delayed.
Essential things to do for faster refunds
It is important to keep a few things in mind to avoid delays in refunds, such as:
- PAN and Aadhaar should be linked
- All income and tax details should be correct
- Bank information should be updated and correct
- E-verification should be completed on time
Various options are available for e-verification nowadays, such as Aadhaar OTP, net banking, Demat account, or e-verification code. This process should be done immediately after filing the return.
Automation is accelerating refunds
In the last few years, the Income Tax Department has made significant changes in the system for ITR processing. Now, almost the entire process has become digital. This has not only made the department's work easier, but taxpayers are also getting refunds in less time.
The need for manual inspection of documents has been greatly reduced in the new system. In many cases, the refund is credited to the account within 5 to 7 days of filing. However, this is only possible if all details are correct and there are no obstacles in the processing.
Avoiding small mistakes is essential
It is often observed that people file returns in haste and do not properly check the required details. For example, providing the wrong bank account details, giving old email or mobile numbers, reporting incorrect income, or not matching TDS information.
These small mistakes can later turn into big problems and can lead to months of delay in refunds.
Therefore, while filing ITR, all details should be filled carefully, and after submitting the return, it should be read again to ensure that nothing has been missed or any mistake has been made.
How to check the status of your refund online
You can easily check the status of your refund by visiting the Income Tax Department's website or the NSDL website. For this, you only need to enter the PAN number and the assessment year information. From there, you can find out whether your return has been processed or not, and what is the status of the refund.
If the refund has been issued, the payment date, bank details, and transaction ID are also available on the same website. This gives taxpayers clear information and there is no confusion.
