ITRs are significant for individuals and companies in India regarding their financial obligations. Taxpayers can file their taxes online. This has led to a notable boost in efficiency and speed. After submitting their ITR, some taxpayers forget to process it. This phase determines if a taxpayer gets a tax refund, must pay more taxes, or is fully approved.
This article explains how long an Income Tax Return (ITR) takes, what procedures are needed, how to track its progress, and how to speed it up. By the end, one would master the many factors behind ITR processing and understand how to make the best of it for oneself.
What is ITR Processing?
The Income Tax Department reviews the taxpayer’s income tax return. This is known as ITR processing. ITR processing is handled by the Central Processing Centre in Bangalore. It assesses income tax returns and verifies the data against public databases. They determine the taxpayers’ ultimate tax due or refund.
Once your return has been filed and confirmed, the CPC will process your ITR by:
- Verifying information: Checking the information supplied in your return against the data available to the department.
- Section 143 (1) requires the CPC to send an intimation notice to the taxpayer’s registered email address, verifying the tax amount payable or the refund due.
- Finalizing the Status: The message will indicate whether the return was accepted, if a refund is due, or if additional taxes are necessary.
If you understand the ITR processing time, you’ll know exactly when to expect your refund or handle extra tax payments.
The Process of ITR Filing and Verification
Before the Income Tax Department may begin processing your ITR, it must first be lodged and confirmed.
How does the process work?
The first step is to file the Income Tax Return. You can do it online through the official website of the Income Tax Department. Choose the correct form depending on your income sources. The verification phase is critical because, without it, the ITR cannot be processed. If you choose e-verification, your return will normally be completed faster.
Section 143(1): The Intimation Notice
After verification and validation, process Section 143(1). Under this section, the IT department will send an intimation letter to the taxpayer. This message verifies that your ITR was processed.
The intimation notification contains crucial information, including:
- Taxes payable: Any discrepancies found in the tax computation or any other tax dues, the notice will indicate what amount is payable.
- Refund Due: If you have any refund against ITR, the intimation shall contain the relevant refund amount.
- No demand: If the ITR is considered correct and complete, a letter will arrive confirming, “No refund or tax demand.”
- A notification is sent by the taxpayer’s registered email address and mobile number. If you do not receive the message in your inbox, check out the spam folder.
Time taken for ITR processing
The duration for which your income tax return is processed is, in most cases, determined by the speed with which the income-tax return is filed and scrutinized. In general, from the stage of verification to intimation issues, it takes around 20 to 45 days. Elaborated here is a brief for the various stages:
- E-Verification: The process will be completed in about 20 to 45 days from the date of e-verification if this option is chosen between you and your accountant.
- Physical Verification (ITR-V): Processing may take marginally longer, since the time taken could extend 15-20 days for the department to receive and process the physical acknowledgment if you send a physical copy of your ITR-V to CPC, Bangalore.
In rare situations, processing may take longer if the Income Tax Department discovers errors or requires extra information to certify your return.
Understanding Different Statuses Post-ITR Processing
After your ITR is processed, the status of your tax return is informed to you via an intimation notice under Section 143(1). Here are three potential outcomes:
- Refund Established: Based upon your confirmed correct ITR demonstrating overtaxing, it will grant a refund from the Income Tax Department. Generally, the refund will take between a span of 20 and 45 days, depending on one’s bank details and method of reimbursement.
- Demand Confirmed: If returns are incorrect or the department finds that you owe more taxes than you pay, you will receive a demand notice. You are obliged to pay any unpaid taxes, though, within the provided timeframe.
- If everything checks out fine with regard to your ITR and no refund is pending or no tax is overdue, you will receive a message declaring “No Demand, No Refund.” This indicates that the department has authorized your return without any revisions.
Factors Affecting ITR Processing Times
The timeframe for processing your ITR by the Income Tax Department will be influenced by different factors.
- Information Correctness: If the information in the return is accurate and responds correctly to what the department has, a shorter time could be required for processing.
- Verification Method: Electronic verification is faster than physical verification. E-verification reduces processing time.
- Discrepancies: If your return has inconsistencies or the data doesn’t match the department’s records, the processing may be delayed.
- Refund Processing: If a refund is due, the processing period may vary based on the payment method.
- ITR Type: Some ITRs (such as ITR-4 or ITR-5) may take longer to process than others because of the intricacy of the taxpayer’s data.
How To Monitor ITR Processing
Taxpayers can check the status of their ITR processing on the IT Department’s website. Here’s how.
Go to the status page. Navigate to ‘Income Tax Returns’ under the section ‘e-File.’ Click on ‘View Filed Returns’.
It will tell you the status of your return as well as updates you may have regarding the refund or request made.
The Income Tax Department also sends email notifications regarding the status of the return or refund and thus one has to keep a check on one’s inbox as well as spam.
Common Pitfalls To Avoid
To avoid processing delays, taxpayers should avoid the following typical mistakes while filing and processing their ITR:
- Incorrect information: Check the details, such as PAN, income statistics, and tax deductions, to guarantee their accuracy.
- Delayed Verification: Failure to verify your ITR or a delay in the verification process can cause a delay in processing time.
- Not Updating Bank Details: Incorrect or missing bank details for refunds might cause delays in the refund process.
Plan for Next Year’s Tax Savings.
To get the most out of your tax planning and guarantee that your ITR is processed on time next year, use a tax calculator early in the year. Estimating your taxes early allows you to change your investments, deductions, and planning to reduce your tax liability.
Conclusion
Understanding ITR processing times is critical for taxpayers trying to better organize their budgets. With correct filing and prompt verification, you may ensure that your tax returns are completed swiftly, decreasing the time it takes to receive a refund or avoiding late fees on tax payments.
The CPC does the ITR processing, with an average turnaround time of 20-45 days after submission of the verified income tax return. Knowing the process helps you to stay abreast, be it with the refund, or perhaps increased tax liabilities.
For further details or assistance in completing the ITR, please visit Tata Capital’s website or download the Tata Capital App to access tools and services that help improve one’s tax planning and filings.
FAQs
Income tax returns (ITRs) in India are normally completed between 15 and 30 days after they are filed, depending on their correctness and complexity.
Your ITR may not be processed within 15 days for a variety of reasons, including inconsistencies, missing paperwork, or pending verification. For any modifications or problems, you should check your e-filing account.
You can view the progress of your ITR processing and any alerts that may have been sent to you by signing into the Income Tax Department's e-filing portal and selecting the 'My Account' option.
23 January 2025
7 mins read
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