26% ITRs yet to be processed after 22 days of the deadline, will your ITR come under scrutiny?
ITR filing: As per data from the ITR portal 73.71% of all the verified ITRs have been processed already. This means about 26% ITRs are yet to be processed. Could it be because these 26% ITRs need additional scrutiny or others? Read the story to kn...
1.87 crore out of 7.1 crore verified ITRs are left for processing
The Income Tax Department has processed 73.71% of all the verified income tax returns (ITRs) as of August 22, 2024, 1 pm. According to data available on the e-filing ITR portal, 7,13,00,901 ITRs were verified and 5,25,53,097 ITRs were processed as on date. This means 26.29% or 1,87,47,804 ITRs are yet to be processed (7,13,00,901 minus 5,25,53,097). If you fall in this 26% group, then you might be curious as to why your ITR has yet to be processed, as more than half of the ITRs have already been processed.
Source: ITR e-filing portal as of August 22, 2024.
The Income Tax Department's Centralized Processing Center (CPC) processes ITRs digitally using automated systems. "Given that most tax returns were filed in the last week of July, near the due date, it is commendable that 70% of them have already been processed in just 20 days. The remaining returns are expected to be processed soon. Once an ITR is processed, taxpayers who claim a tax refund can expect it soon," says Ankit Jain, partner, Ved Jain & Associates. However, when we compare it with the recent data on average processing time coming down to 11 days in 2023 from 93 days in 2013, it appears that the IT department may be taking more time on the remaining ITRs.
Processing of ITR has nothing to do with selection of ITR for scrutiny
If you are wondering whether your ITR has been picked for scrutiny, since about 5.2 crore ITRs out of 7.1 crore have been processed already, then it is nothing to worry about. Experts emphasize that the processing and selection of ITRs for scrutiny are independent processes.
"It's important to note that the selection of returns for scrutiny is handled independently by the tax authorities and is unrelated to the processing of tax returns. The processing stage primarily checks for mathematical accuracy and verifies claims for tax credits. Scrutiny notices are issued later when the tax authorities identify ITRs that require further examination or additional information," says Jain.
"I would say, that while there is a slight chance, it’s more likely that the delay is due to procedural reasons rather than scrutiny. There is a possibility, but it’s not necessarily the case that all unprocessed ITRs are picked for scrutiny. If your ITR were selected for scrutiny, you would typically receive a notice or communication from the Income Tax Department outlining the reason and required actions. Additionally, it’s important to note that even if your ITR is processed without any demand, it can still be selected for scrutiny later," says CA Swapnil Patni, Founder, SPC Edutech.
CA Sandeep Agrawal, Co-founder & Director of Teamlease Regtech concurs with Jain and adds, "While it's possible that a portion of the unprocessed ITRs may be flagged for scrutiny, this is unlikely to be the primary reason for the delay in processing of such a large percentage of filings."
Why your ITR may not have been processed as on date
Experts say there could be multiple reasons why your ITR has not been processed. Some of these reasons include PAN name mismatch cases, complicated ITR forms, scrutiny cases, etc.
CA Abhishek Soni, co-founder, Tax2Win, believes that the delay in processing of such a substantial portion of ITRs could be due to the type of ITR form chosen by the taxpayer.
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"ITR forms like ITR-2 and ITR-3 are more complex because they cater to individuals with multiple income sources, including capital gains, business or professional income, and foreign assets. These forms require more detailed information, which can lead to longer processing times compared to simpler forms like ITR-1. The complexity of the information and the need for thorough verification could be why a significant percentage of these filings take longer to process," says Soni.
Agrawal says that larger tax refund claims could also be a reason behind the delay in processing.
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"A possible reason why tax refunds are getting delayed for some taxpayers could be that their refund claims are large, so they need rigorous checks and balances by the tax authorities. Moreover, ITRs with errors, incomplete information, or inconsistencies (such as mismatched PAN details or incorrect bank information) are typically flagged for review. This can delay the processing of such ITRs," he explains.
According to Agrawal from Teamlease Regtech, "Generally, the processing timeline for ITRs can vary. The process for ITR-1 is generally straightforward. In the past, individuals who relied solely on Form 16 for their tax filing typically saw their ITR processed within 10 days, with refunds often issued within 15 days. ITR-2 requires additional details, such as capital gains, which necessitate thorough verification. Consequently, processing usually takes between 20 to 45 days, though it may occasionally take longer due to the need for more detailed checks. Given that ITR-3 involves more complex data, including business income, the processing time typically extends to 30-60 days, as it requires a more in-depth review."
Discrepancy meaning in ITR: Reasons tax department may find discrepancies in your ITR
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Once your ITR has been filed, you may check if it has been accepted and processed by the Income Tax Department. In some instances where some discrepancies are found, you may need to respond to the communication from the ITD. So, it is best for you to check your ITR status periodically.
Once your ITR has been filed, you may check if it has been accepted and processed by the Income Tax Department. In some instances where some discrepancies are found, you may need to respond to the co..
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Mismatch in TDS: At the time of filing the ITR, the Income Tax department matches it with the data mentioned in Form 26AS and Form 16. And if there is a mismatch, the IT department will send you a notice to either correct it in the revised ITR or need clarification in response.
Discrepancy in Income Tax Return: The income tax authorities may send you a notice for non-disclosure or under-disclosure of income if they suspect that you have not disclosed all your income from various sources. To avoid this, you should collect all your financial documents and evidence of all your income sources, such as salary slips, bank statements, bills, etc., and report them accurately when filing your income tax return.
Mismatch in TDS: At the time of filing the ITR, the Income Tax department matches it with the data mentioned in Form 26AS and Form 16. And if there is a mismatch, the IT department will send you a no..
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If an error is found in your filed ITR, the income tax department can send you an income tax notice.
If an error is found in your filed ITR, the income tax department can send you an income tax notice.
This notice is sent to an individual after the income tax department processes the ITR. The notice informs an individual whether his ITR calculations match with that of the income tax department. If there is a mismatch, then this intimation notice will inform whether there is a refund due or additional taxes are payable. An individual will get this notice, even if there is no mismatch or error in the ITR. If the intimation notice is issued due to a refund or if there is no mismatch between you and the tax department’s calculation, then you do not need to respond. However, if there is a tax demand, the taxpayer is expected to respond within 30 days from the date of issue of intimation notice either agreeing/disagreeing with the adjustment proposed.
This notice is sent to an individual after the income tax department processes the ITR. The notice informs an individual whether his ITR calculations match with that of the income tax department. If ..
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Notice under section 139(9) of the Income Tax Act, 1961 is sent when there are some errors in the filed ITR. The tax department will send this tax notice requiring the assessee to correct the errors by filing a revised ITR. Income tax notice under section 139(9) may be issued within nine months from the end of the financial year in which the return is filed. Usually, the tax department allows individuals a 15 days’ period to respond
Notice under section 139(9) of the Income Tax Act, 1961 is sent when there are some errors in the filed ITR. The tax department will send this tax notice requiring the assessee to correct the errors ..
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To respond to an income tax notice under Section 143(1), follow these steps, as per the HDFC Life website: Step 1. Understand the nature of adjustments made and the reasons mentioned in the notice. Step 2. Prepare a response providing appropriate explanations, supporting documents, or corrections. Step 3. Submit your response within the specified time, either online through the income tax e-filing portal or by physically visiting a designated office. Step 4. Maintain a copy of your response and proof of submission for future reference
To respond to an income tax notice under Section 143(1), follow these steps, as per the HDFC Life website:Step 1. Understand the nature of adjustments made and the reasons mentioned in the notice.Ste..
