ITR Processing time: How long does ITR return take to process?

ITR Processing time: How long does ITR return take to process?

Income tax return (ITR) processing is a crucial step carried out by the Central Processing Centre (CPC) in Bangalore, responsible for primary assessments. Once the Income Tax Department receives a filed and verified ITR from the taxpayer, the CPC unit takes over for processing. Upon completion, an intimation notice under Section 143(1) is sent to the registered email address, detailing the tax amount payable or refund due. For the financial year 2023-24 (assessment year 2024-25), timely submission by the July 31, 2024 deadline is essential to ensure the swift processing of returns and the timely crediting of any refunds to the filer’s bank account. This article gives you detailed information regarding ITR processing time, factors, how to track your processing time, and intimations received after ITR is processed.

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What is ITR Processing Time?

The Income Tax Return (ITR) processing time in India signifies the duration taken by the Income Tax Department to assess and finalize your submitted ITR. This timeframe commences upon the successful ITR e-verification. The Indian government has implemented significant advancements, resulting in a notable reduction in processing times. For ITRs filed for Assessment Year 2023-24 (Financial Year 2022-23), the ITR processing time typically falls within the certain range of days. It is crucial to note that this timeframe is specifically applicable to e-verified returns. Employing the offline verification method with the ITR-V form may lead to extended processing durations.

What is the Average ITR Processing Time in India?

According to tax professionals, the average ITR processing time is 15-45 days from the e-verification of the ITR date. The Indian Income Tax Department dramatically improved ITR processing times. For tax returns filed in 2022-23 (assessment year 2023-24), the average processing time after verification has been reduced to just 10 days. This is a major improvement from 82 days in 2018-19 (assessment year 2019-20) and even faster than the 16 days in 2021-22 (assessment year 2022-23).

Factors Affecting the ITR Processing Time

The time taken by the Income Tax Department to process your ITR can vary depending on several factors. Here’s a breakdown of the key influences:

• E-verification: Timely e-verification of your ITR using Aadhaar or other methods significantly expedites processing. Physical verification of the ITR-V form can lead to delays.
• Complexity of ITR: Simple ITR forms (like ITR-1) are generally processed faster compared to complex ones (like ITR-3), requiring extensive scrutiny.
• Discrepancies in ITR: Any inconsistencies or errors in your ITR, such as unmatched income details or missing documents, can trigger a delay for further assessment.
• Scrutiny Selection: The Income Tax Department randomly selects a certain percentage of ITRs for detailed scrutiny. This can significantly extend the processing timeline.
• Workload of CPC: The Central Processing Center (CPC) responsible for ITR processing experiences fluctuations in workload throughout the year. Higher workloads can lead to temporary processing delays.

What to Do If the ITR return is not processed?

If the taxpayer’s ITR filing remains unprocessed after a reasonable timeframe, it is recommended that they pursue rectification through two primary channels. Firstly, the Income Tax Department’s e-filing portal offers a “Grievance redressal” mechanism accessible through the “Grievance tab.” This online platform allows taxpayers to lodge a formal complaint detailing the specifics of their unprocessed ITR.  Alternatively, taxpayers can choose to directly contact the Central Processing Centre (CPC) via their designated helpline numbers. By utilizing either of these approaches, taxpayers can initiate official inquiries to expedite the processing of their ITR.

How to Track Your ITR Processing Status?

You can conveniently track the processing status of your ITR through the Income Tax Department’s e-filing portal:

1. Visit the Income Tax Department’s e-filing portal.
2. Login using your credentials (PAN, password).
3. Navigate to the “e-File” section.
4. Select “Income Tax Returns” followed by “View Filed Returns.”
5. Locate the ITR you wish to track and click on “Processing Status.”

The portal will display the current processing stage of your ITR.

What are the Intimations Received After ITR is Processed?

Once the Income Tax Department finishes processing your Income Tax Return (ITR), they will send you an intimation notice under Section 143(1) of the Income Tax Act. This intimation acts as a communication regarding the outcome of your ITR assessment. It can fall into three main categories:

1. Intimation for Tax Demand:

The Centralized Processing Center (CPC) meticulously compares the information you provided in your ITR with records held by the Income Tax Department. These records include Form 26AS (Annual Information Summary/Tax Information Summary), SFT details (Statement of Financial Transactions), and various other sources. If any discrepancies arise between your return and their records, they might issue a notice under Section 143(1). This notice could indicate:

• Additional Tax Liability: Errors or omissions in your ITR, such as mathematical mistakes or claiming incorrect deductions, might lead to additional tax you owe.
• Departmental Adjustments: The CPC might identify discrepancies and make necessary adjustments, like correcting calculations or disallowing invalid deductions. This can result in a revised tax demand reflected in the intimation notice.

2. Intimation for Tax Refund:

If, after a thorough examination, the Income Tax Department finds your ITR accurate and complete, they will process a tax refund if applicable. This means you overpaid taxes during the year, and the department will return the excess amount. However, it’s important to note that if any discrepancies are found during processing, it could delay or even prevent your refund until the issues are resolved.

3. No Demand or Refund Case:

This intimation signifies that the Income Tax Department processed your ITR without any adjustments or changes to your tax liability. In simpler terms, you neither owe any additional tax nor are entitled to a refund based on your ITR information and the department’s records.

Conclusion

Understanding ITR processing time and the factors influencing it empowers you to manage your expectations and potentially expedite the process. By filing your ITR electronically, verifying it promptly, and maintaining accurate records, you can contribute to a smoother and more efficient ITR filing experience. Remember, timely action and clear communication are key to resolving any delays or discrepancies that might arise during processing.

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