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Taxpayers getting faster refunds this year? FM says ITR processing time reduced to 10 days from 93 days

Last week in Parliament, the finance minister Nirmala Sitharaman stated that the average time taken to process income tax returns (ITR) has decreased from 93 days in 2013 to 10 days. While this is a commendable achievement for the government, does this mean you can expect faster tax refunds in the future? Read on to find out.

Not all ITRs are going to be processed in 10 days

The FM mentioned that the ‘average’ processing time has been reduced to 10 days now. This does not mean that all types of ITRs will get processed in 10 days. The higher the complications of an ITR form, the higher the time it takes to process it. ITR-3 is more complex than ITR-2, and ITR-2 is more complex than ITR-1.

“Normally refund claims of ITR-1 gets prioritised followed by ITR-2 and ITR-3 in view of the simple and complex structure of the income returned. Refund claims in ITR-1 without any defect/adjustments generally are received by the taxpayers within a few days from the date of filing returns. However, if returns are filed very close to the last date of filing of ITR there could be delay in processing of returns Refund claims in ITR-2 and ITR-3 without any

Here’s what has changed since 2013:

Aadhaar-Based Verification: The introduction of Aadhaar-based e-verification allows taxpayers to instantly verify their returns without needing to send a hardcopy acknowledgment, which has dramatically reduced processing time.

New tax filing Portal (2021): The launch of the new tax e-filing portal in 2021 marked a significant improvement. The portal features a user-friendly interface, making tax filing, grievance redressal, and request submissions easier and more efficient. This has provided much-needed relief to taxpayers and further sped up the overall process.

Automation and Digitisation: Increased automation and digitization of the filing process have also played a critical role in reducing errors and speeding up processing.

Centralised Processing and Automation: The integration of more automated systems and centralised processing has streamlined the entire process, leading to quicker turnaround times.