What to do when your tax return gets stuck

As per Income tax laws, the income tax department is supposed 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 FY24 (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

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.

Talking to Bizz Buzz, Abhishek Aneja, a New Delhi-based tax expert said, “In the last few years, the time taken by the income tax department to process returns has decreased considerably in most cases.”

“However, it has sometimes been noticed that in some cases, especially where refund amounts are higher, refunds take generally longer than ITRs with small or no refund amounts. We have also observed that most individual ITRs are processed within 2-3 months of filing. If it still takes longer than expected, taxpayers can raise a grievance on the income tax e-filing portal,” he said.

If you have filed an ITR in the recent times within the deadline 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. Since there's a timeline as per statutes, the assessee can only wait.

But the larger message as well as picture is, that the IT department is scrutinizing the returns even more closely to ensure that the details therein are accurate and totally aligned with the assessee's known sources of income.

MV Hariharan, former treasury head of SBI said, “The patterns of expenditure like credit card spends and others like say, purchase of gold or luxury items and vehicles, wherever the Pan number is given need to be checked for likely evasion of taxes.”

While the department now is definitely more equipped with the required tools and analytics for this, the emphasis is on compliance and to ensure that the government gets revenue where it's due. However the ticket sizes and volumes are focused more on bigger refunds and occasionally first time assessees. It's also to give the necessary indication of better oversight of the entire process, he added.

As per Income tax laws, the income tax department is supposed 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 FY24 (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. A taxpayer is eligible to receive interest on the income tax refund. However, it comes with a rider. The interest is paid only if the refund amount is more than 10 per cent of the actual tax liability. It is applicable to those taxpayers who have filed the ITR on or before the due date of July 31.