The Income Tax (I-T) department is planning to come up with a system to help individuals get their tax refunds in an easy and quick manner. The tax department has decided to introduce a system to reduce the average processing and issuance time for tax refunds. The new timeline for the refund process will be reduced from 16 days to just 10 days, a newspaper report claims.
According to the report by Business Standard, the revenue department is not only looking at reducing the refund timeline but is also planning to implement these changes from the current fiscal year.
The report quoted an anonymous government official and said, “In 2022-23, the average time taken for processing tax returns was 16-17 days. It was 26 days in the preceding year, 2021-22. Now we are looking at processing tax returns in 10 days and issuing refunds simultaneously.”
The tax refunds worth Rs 72,215 crore for the April 1 to August 21 period in the year have already been issued, with Rs 37,775 crore issued to companies and Rs 34,406 crore issued to individuals, the report stated. Further, the gross collection of direct taxes, inclusive of both personal income tax and corporate tax, was worth Rs 6.6 lakh crore for the period.
Also Read : SEBI Imposes Rs 20 Lakh Fine On SIMR For Violating Regulatory Norms
Another government official noted that there was a visible increase in the percentage of tax returns in the previous fiscal year. He stated that the current fiscal year is projected to witness a bigger jump in ‘processing time to the extent that it could shorten the timeline of the issuing refunds’. Notably, technological advancements and an efficient system are helping to create quicker processing of all tax returns.
The report added that the tax department is using an electronic approach to conduct verifications and tax return assessments, and has been using an anonymous back office run by tax experts and officials to manage the whole process. The department ensures there is no direct personal interactions between taxpayers and the officials, the report stated.
The report cited another official and stated that the tax department is moving away from the earlier practice of holding refunds of companies to display a strong revenue collection. Rather, the focus is now on efficiently and timely processing refunds as soon as tax returns are completed.
The revenue department is further focused on developing an upgraded system that will allow the department to process refunds to the taxpayers within 24 hours. Currently, about 10 per cent of returns are processed between 3 to 4 working days. The report added that officials are confident that the quick refund processing will become the norm in the coming years.
