Income Tax Department Consider Launching Initiative to Facilitate Refunds More Quickly

As there are currently 3.5 million pending tax refund cases, the Income Tax (IT) department is examining the organization of campaigns to aid taxpayers. Additionally, they are actively exploring alternative methods to expedite the refund processing.

The process of handling income tax refunds faced challenges in the past when it was a manual process. In 2011, to streamline the process, the department transitioned to electronic methods for issuing returns.

Misinformation regarding taxpayers' bank account and permanent account number (PAN) details is causing delays in issuing tax refunds. 

The Central Board of Direct Taxes stated that the department is in touch with these taxpayers whose refunds are stuck and aims to credit the refunds to the correct bank accounts promptly. However, a year ago, the department introduced a unique system to manage such cases where refunds are held up for various reasons. 

They send an email to the taxpayer, indicating they will receive a call within three days from a specific number. Following this conversation, issues are resolved with the help of a call center based in Mysuru. In the fiscal year 2023, this call center resolved over 140,000 refund cases.

The tax department should periodically send reminders to validate bank accounts since this is a common reason for refund delays. If your PAN is linked with your bank accounts, it usually takes 1-2 days to validate them. However, if validation is still unsuccessful, you can raise a grievance on the tax portal.

When refunds can not be processed due to a lack of information from the taxpayer, notices or emails should be sent to request the required details. Alternatively, a goodwill campaign can be organized, offering a window of opportunity for taxpayers to seek assistance in obtaining their refunds.

For non-residents without bank accounts in India, experts suggest providing an alternative method for crediting tax refunds. In the current fiscal year until October 9, the Income Tax Department has issued refunds totaling Rs 1.5 trillion. In the previous fiscal year (FY23), refunds worth Rs 3.07 trillion were issued by the Income Tax Department.

Also Read: New IMPS Rule: Send Up to Rs 5 Lakh with Mobile Number and Bank Name – No Need for Beneficiary, Account, or IFSC

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