35 Lakh Income Tax Refund cases held up for various reasons: CBDT Chairperson

Around 35 lakh refund cases are currently “held up” with the Income Tax Department due to mismatch and validation of taxpayers’ bank accounts, and the taxman is reaching out to such assessees through a special call centre, CBDT Chairperson Nitin Gupta said on Tuesday.

The head of the direct taxes body stated that the department is “in correspondence” with such taxpayers and that it is their goal to resolve these issues as soon as possible.

“We want to credit the refunds to the correct bank accounts of the taxpayers quickly,” he said in a statement.

When asked about instances where refunds were stuck because taxpayers were receiving old demands from years around 2010-11, Gupta said the department had undergone a technology shift around 2011 — from paper-based registers to computers — and thus some of those old demands were showing up in assessees’ accounts.

“About a year ago, we launched a one-of-a-kind demand management facilitation system for all such cases where refunds are delayed for a variety of reasons. An email is sent to the taxpayer stating that they will receive a call three days after the dispatch of the email from a specific number, and the issues are being resolved as a result of this conversation,” he told reporters here.

“We have resolved 1.4 lakh such entries over the last year following this Mysuru-based call centre interaction, and the taxpayer can either accept or contest the demand,” said the Central Board of Direct Taxes (CBDT) head.

Initially, this call centre served four of our product lines: Karnataka and Goa, Mumbai, Delhi, and the north-west region, but he plans to expand it to other regions and cities.

The CBDT is the IT Department’s administrative body.

Apart from the record update at the end of the department or the assessing officer, Mr Gupta stated that there are two other reasons for refunds being delayed.

He explained that in some cases, refunds are delayed because the taxpayer has not validated their bank account, the bank has merged, or the assessee has changed cities and the IFSC has changed.

“We strongly advise taxpayers to have their bank accounts validated. We have approximately 35 lakh cases where such mismatch has been detected, and we are in contact with such taxpayers via official communication channels as well as the call centre,” he said.

According to official data for the financial year 2023-24, a total of 7.27 crore ITRs were filed, of which 7.15 crore were verified by taxpayers and 6.80 crore were processed by the department.

According to the data, approximately 93.5 percent of duly verified ITRs have been processed to date.

Mr Gupta stated that the ITR-U, or income tax return-updated, introduced by the Union government in Budget 2022-23 has collected 1,300 crore in additional tax after 16.8 lakh such returns were filed by taxpayers during the current financial year of 2023-24.

He was also questioned about the new tax regime announced by the Union government in the previous Budget.

“We find that the corporates have filed about 60 per cent of their profits under the new tax regime during the last fiscal and we also hope that 60-70 per cent of individual taxpayers will shift to this new tax regime,” he told reporters.

The new tax regime aims to eliminate various deductions and claims while providing taxpayers with a flat and lower tax rate.

Mr Gupta went on to say that the direct tax collection was going well, and that “to date,” the department had collected 9.57 lakh crore in net revenue (under the personal income tax, corporate tax, and other taxes heads) after issuing 1.50 lakh crore in refunds during this financial year.

He stated that the department is confident that it will exceed the budget estimates for direct tax collections at the end of this financial year in March 2024. The budget for 2023-24 estimates direct tax collection at slightly more than 18.23 lakh crore, 9.75 percent higher than the 16.61 lakh crore collected last financial.