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Understanding the Processing Time for Income Tax Returns (ITRs)

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Last Updated on September 5, 2023 by Kanakkupillai

Processing Time for ITR

The deadline for filing income tax returns (ITRs) for the financial year 2022-23 (assessment year 2023-24) was July 31, 2023. However, many taxpayers are still waiting for their ITRs to be processed by the Income Tax Department. This delay has led to frustration among individuals eagerly awaiting income tax refunds. In this article, we will explore how long it typically takes for the tax department to process ITRs and the reasons behind the delays.

Processing Timeline

Tax experts suggest that the processing of ITRs usually takes an average of 15 to 45 days from the date of e-verification of the ITR. However, the processing time can be longer for those who opt for the offline verification method using the ITR-V form.

Once an ITR is successfully processed, the individual is notified through an Intimation under Section 143(1) of the Income Tax Act, 1961. It’s worth noting that the Income Tax Act specifies that no intimation under Section 143(1) can be issued more than 9 months after the end of the financial year in which the return of income is filed. Therefore, for ITRs submitted for FY 2022-23 (AY 2023-24), the intimation notice should be received on or before December 31, 2024.

If an ITR is not processed within this stipulated time frame, the tax department must flag it for further scrutiny and examination. This ensures that ITRs do not remain in limbo indefinitely.

What to Do If Your ITR Is Not Processed

If your ITR remains unprocessed for an extended period, you can take action by raising a complaint through the “Grievance tab” on the income tax portal. Additionally, you can contact the central processing centre (CPC) through their helpline numbers for assistance in resolving the issue.

Factors Affecting Processing Time

Several factors contribute to the varying processing times of ITRs. These factors include:

  1. The complexity of the ITR: ITRs with more intricate financial details, such as business income or capital gains, often require more thorough verification by income tax authorities. Consequently, they tend to have longer processing times.
  2. ITR Form Used: Different ITR forms have varying processing times. Simpler forms like ITR-1, designed for individuals with straightforward income sources, are processed more quickly. In contrast, more complex forms like ITR-3, used by individuals and Hindu Undivided Families (HUFs) with business or professional income, require more detailed scrutiny, leading to longer processing times.

Types of Intimations

Once an ITR is processed, the income tax department sends an intimation notice under Section 143(1). This notice can fall into one of the following categories:

  1. Tax Demand Notice: This notice is issued when the income tax department finds discrepancies between the ITR filed by the taxpayer and their records. It may lead to additional tax liabilities or adjustments for errors, incorrect claims, or disallowed deductions.
  2. Income Tax Refund Due: If no discrepancies are found in the ITR, the income tax department issues an intimation with tax refund details.
  3. Neither Tax Demand Nor Refund: In cases where no additional tax liabilities or refunds exist, individuals receive an intimation indicating that their ITR has been accepted without further adjustments.

Conclusion

The processing time for income tax returns can vary depending on several factors, including the complexity of the ITR and the form used. While taxpayers may experience delays, it’s essential to remember that the tax department works diligently to process ITRs and ensure accurate tax assessments. If you are waiting an extended period, don’t hesitate to raise a complaint or contact the central processing centre for assistance. Ultimately, timely processing ensures that taxpayers receive the refunds they are entitled to and maintains the tax system’s integrity.

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