Still waiting? These could be reasons for not receiving your ITR refund

Delays in receiving Income Tax Returns (ITR) refunds have become a common concern for many taxpayers. Despite filing their returns accurately and on time, numerous individuals find themselves waiting for their refunds. Understanding the reasons behind these delays can help taxpayers navigate the complexities of the tax system and ensure a smoother refund process.

 

“The Income Tax Department generally processes ITRs and issues refunds within 20 to 45 days after verification. However, the department is legally required to process the return and issue refunds within 9 months from the end of the financial year in which the return was filed. Delays may occur if the ITR is processed with a demand or involves complex cases, extending the processing time up to 1 year in some situations. Refunds may be delayed but will eventually be processed, and taxpayers are entitled to interest on the refund amount under Section 244A of the Income Tax Act,” said Amit Bansal, Partner, Singhania & Co.

 

Common reasons for delayed ITR refunds

 

Mismatch between Form 26AS and ITR: One of the leading causes of refund delays is discrepancies between the taxpayer's ITR and Form 26AS, which provides a consolidated view of taxes deducted at source (TDS). If the TDS claimed in the ITR does not match the amount reflected in Form 26AS, the Income Tax Department may hold back refunds until these discrepancies are resolved.

 

Pending verification: After filing an ITR, taxpayers must verify their returns either electronically or by sending a signed copy of the ITR-V to the Centralized Processing Centre (CPC) in Bengaluru. Failure to complete this verification within 30 days can result in the return being treated as unfiled, thereby delaying any potential refunds.

 

Incorrect bank account details: Providing incorrect bank account information is another frequent reason for delayed refunds. The Income Tax Department processes refunds through direct bank transfers; thus, incorrect account numbers or IFSC codes can lead to failed transactions.

 

Adjustment against previous liabilities: If taxpayers have outstanding tax dues from previous assessment years, the Income Tax Department has the authority to adjust any pending refunds against these liabilities. This adjustment process can lead to delays, as taxpayers may receive notices regarding such adjustments. It is advisable for taxpayers to clear any outstanding dues promptly to avoid complications with future refunds.

 

Errors in filing: Filing an incorrect or incomplete return can significantly delay refunds. Common errors include miscalculations, omission of income, or failure to submit necessary documents. 

 

Claiming ineligible deductions: Taxpayers who claim deductions or exemptions that do not meet eligibility criteria may face delays as their returns are subjected to additional scrutiny. 

 

Kunal Savani, partner, Cyril Amarchand Mangaldas explains what you should do if you have not received the tax return.

 

The taxpayer should first check the status of the refund on the Income Tax e-filing portal, which provides insights on the current processing stage along with detailed issues that may need attention. The taxpayer should also double-check the tax return filed for any errors or missing information, which may be causing the delay. Correcting these issues promptly can help expedite the processing of the refund. Where the delay is significant and unexplained, the taxpayer can contact the income tax department directly, or consider raising a grievance through the ‘e-Nivaran’ section on the e-filing portal. Please note that delays are normal, and when the ITR is filed within the prescribed due date, the taxpayer is entitled to interest at 0.5 per cent per month or part of a month, from the date the ITR is furnished to the date of the refund, subject to certain conditions.