Recently, there has been a growing number of complaints on social media from taxpayers who have been waiting for their income tax refunds for a long time. In several cases, it has been seen that even after five months of filing their income tax returns (ITRs), the refund has not been deposited in their bank accounts. While this delay is undoubtedly disappointing, this is not an exception this year. This is because the Income Tax Department has tightened the return verification and monitoring process this year.
Usually, refunds are delayed if the income tax returns are not fully processed or if there is any discrepancy in the information submitted. According to experts, not completing all the necessary steps properly after filing the return is also one of the major reasons for the refund to be stuck.
If not verified, the return is not valid
Many taxpayers ignore the verification process after filing their ITRs. However, the process is not complete just by filing the return. It is mandatory to verify the return using Aadhaar OTP, Net Banking, Electronic Verification Code (EVC) or by sending the signed ITR-V to CPC Bengaluru. If the verification is not completed within the stipulated time, the return concerned is treated as invalid and no refund will be given in that case.
Why the delay?
This year, the Income Tax Department has taken a stricter stance in examining returns. If there is a discrepancy between the income declared in the ITR and the information in Form 26AS, Annual Information Statement (AIS) or Taxpayer Information Summary (TIS), the relevant return goes under additional scrutiny. As a result, the processing time naturally increases.
Reasons for refund being stuck
If there is any old tax due against the taxpayer, the refund can still be stuck. Apart from this, even if a notification is issued under Section 143(1) of the Income Tax Act, 1961, the refund remains stuck. In many cases, the deposit of money is also delayed due to incorrect bank account numbers, inactive or unverified accounts being added.
Some taxpayers are sent notices from the Income Tax Department seeking explanation or submitting additional documents. Till the notice is responded to, the refund is stuck.
What taxpayers should do
Experts advise not to panic in this situation. Taxpayers should log in to the Income Tax e-filing portal and go to the ‘Pending Actions’ section to regularly check if there are any notices or notifications.
If you receive a notice, you need to download it and compare the information with your filed ITR, Form 26AS and AIS. If the department’s observation is correct, it should be accepted. And if there is any mistake, you should attach the necessary documents and submit a proper explanation through the portal.
How to know the status of the refund
To know the progress of the refund, taxpayers can go to the Income Tax e-filing portal and log in with their PAN and password. By going to the ‘View Returns/Forms’ option and selecting ‘Income Tax Returns’ and selecting the relevant assessment year, the current status of the refund can be known through the ITR acknowledgement number.
According to experts, keeping a regular eye on the portal and responding quickly to the notices speeds up the refund process.