If you have filed ITR-2 or ITR-3 for the financial year 2023-24, there is a good chance that you may not have got your tax refund yet. Keep in mind that you can only get a tax refund once your verified income tax return (ITR) gets processed by the Income Tax Department.
How long does it take to get your ITR refund? According to the ITR e-filing website, “Refund processing by the tax department starts only after the return is e-verified by the taxpayer. Usually, it takes four to five weeks for the refund to be credited to the account of the taxpayer. However, if a refund is not received during this duration, the taxpayer must check for intimation regarding discrepancies in ITR; check email for any notification from the IT department regarding the refund,”
There are many taxpayers who receive a refund within the specified time limit and there are others for whom it may take longer. Read below to find out how much time it may take to process various ITR forms and credit ITR refunds.
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How much time generally does it take for ITRs to get processed?
ITR-3: This can take a bit longer, around 30-60 days, as ITR-3 involves more complex data, including business income, which requires more thorough scrutiny, shares CA Amit Bansal, Partner – Direct Tax, Singhania & Co.
ITR-2: It generally takes around 20-45 days, although it can sometimes be slightly longer due to the more detailed information required, he adds.
ITR-1: “In the case of ITR-1, the process is typically straightforward. In previous years, taxpayers who submitted their returns solely based on Form 16 had their returns processed in less than 10 days and their refunds received within 15 days,” says Advocate Adithya Reddy, a international tax lawyer.
Bansal informs that ITR-2 includes additional details such as capital gains, which require more verification and scrutiny. “Hence extending the processing time of such an ITR.”.
“Generally, it is observed that simpler forms like ITR-1 are processed more quickly as compared to complex forms like ITR-3 which is used by individuals and HUFs with business or professional income,” says CA Muskkan Kukreja, Assistant Director and Program Coordinator -Accounting and Finance, S K Somaiya College, Somaiya Vidyavihar University.
Bansal says that some of his clients got the tax refund within a week, while for some others even the ITR has not been processed yet.
“For individual clients this year, refunds have generally been processed within 20-45 days for ITR-1 and ITR-2. However, there have been certain clients who received refunds within a week or had their ITR processed within two to three days. The processing time for ITR-3 has typically taken around 30-60 days. There’s no clear pattern, as the duration largely depends on the complexity of the return and the accuracy of the information submitted,” says Bansal from Singhania & Co.
How much interest will you get on income tax refunds?
If you file an ITR, verify it and it gets processed then you get an intimation from the tax department informing you about the tax refund due to you. You are eligible for an interest on such a tax refund due.
Kukreja from S K Somaiya College explains, “Where the income-tax return for FY 2023-24 has been filed within the prescribed due date, interest at 0.5% per month or part of the month (i.e. 6% per annum) is paid from April 1, 2024, till the date of refund. In case there is a delay in filing the income-tax return, interest is payable from the date of furnishing the ITR to the date of refund. However, no interest is payable by the income-tax department if the refund amount due to the taxpayer is less than 10% of the actual income tax liability.”
Read More: ITR refund status: Check Income Tax Department’s update on processing
When are you eligible for a tax refund?
It is not that if you file an ITR then you become eligible for a tax refund. The refund of tax paid is only given if your total tax liability is less than the tax already deposited to the government through advance tax, TDS, etc.
“The Income Tax Department initiates a refund amount when the amount paid in taxes exceeds the actual amount due to tax paid. The tax is computed by the income tax department after accounting for all deductions and exemptions at the time of assessment,” says Reddy.
