Income tax return processing status: How much time it takes for tax department to process ITR

The deadline for filing the income tax return (ITR) for the financial year 2023-24 (assessment year 2024-25) was July 31, 2024. Even when the ITR is filed by the deadline, it is important to ensure that the Income Tax Department processes it. If the ITR is not successfully processed, the income tax refund will not be credited to the bank account of the ITR filer.

Time it takes for ITR to get processed successfully

Tax professionals suggest that typically, the processing of income tax returns usually takes an average of 15-45 days from the e-verification date of the ITR. If the offline verification method (ITR-V form) is used, the time limits are extended.

Also read: What is Form 16? How to download Form 16 to file income tax return (ITR)

After processing an ITR, the individual will receive a notification through the issuance of an Intimation under Section 143(1) of the Income Tax Act, 1961. According to the Income Tax Act, no intimation under section 143(1) can be issued after 9 months from the end of the financial year in which the return of income is filed. Therefore, for ITRs submitted for FY 2023-24 (AY 2023-24), the intimation notice will be received on or before December 31, 2025.

What to do if intimation under section 143 (1) is received after filing ITR: How do I reply to income tax notice under section 143 (1)?

Remember, once you submit your income tax return, it should be processed within nine months from the end of the financial year. If the processing takes longer, the tax department is required to further review your return. This means your filed return cannot remain unprocessed.

What to do if ITR is not processed

If a taxpayer's income tax return (ITR) isn't processed after a significant wait, they can lodge a complaint using the "Grievance tab" on the income tax portal. Additionally, the taxpayer can contact the central processing centre (CPC) using their helpline numbers.

Why does ITR processing take time?

The processing time of an ITR varies based on multiple factors, including the form selected, the complexity of the ITR, the amount of claims in terms of deductions/exemptions, and whether these are already covered in Form 16.
One factor that majorly contributes to the delayed processing of ITR is the ITR form used.

Different ITR forms have varying processing times. Simpler forms like ITR-1, used by individuals with straightforward income sources, are processed more quickly than complex forms like ITR-3, used by individuals and HUFs with business or professional income. This is because forms with more detailed financial information, such as business income or capital gains, require thorough verification by income tax authorities, leading to longer processing times.

Intimations that will be sent once an ITR is successfully processed

Once the ITR is processed, the income tax department sends intimation notice under Section 143(1). An intimation notice can represent any of the following situations:

• Intimation for tax demand: When processing your tax return, the Centralized Processing Center (CPC) verifies the information provided in your return with the records held by the income tax department, such as Form 26AS/Annual Information Summary/Tax Information Summary, SFT details, etc. If the tax department finds discrepancies between the information in a tax return and its records, it may issue a notice to the taxpayer. This notice could indicate that there is additional tax to pay due to errors or omissions in the return or adjustments for things like mathematical mistakes or incorrect deductions. The notice, issued under section 143(1), will reflect any necessary changes after these adjustments.
• Intimation for tax refund: When the income tax department finds no issues with the taxpayer's filed income tax return, it issues a tax refund. If the department finds any issues, it will issue the refund accordingly.
• No Demand or Refund Case: You may receive this notification if you don't owe any taxes or if you're not eligible for a refund. It typically happens when the income tax department processes your tax return without making any additional changes that would affect your tax liability.

What did the income tax department say about ITR processing times?

In a press release dated September 5, 2023, the income tax department said "The Department's efforts to provide seamless and expeditious taxpayer services are being continuously strengthened. In line with the same, average processing time of ITRs (after verification) has been reduced to 10 days for Returns (ITRs) filed for AY 2023-24 (FY 2022-23) compared to 82 days for AY 2019-20 (FY 2018-19) and 16 days for AY 2022-23 (FY 2021-22)."

Also read: Average processing time of income tax return (ITR) after verification reduced to 10 days: CBDT