If you have filed your income tax return (ITR) for the 2020-21 appraisal year (AY) and have not received a refund so far, you are not alone. A technical update for faster ITR processing could be the reason for the delay.
Many taxpayers, even those who filed their taxes in June or July, took to Twitter to express their concerns about refunds. Placing the blame on technical issues, the IT Department tweeted: “As part of our commitment to better taxpayer services, we are moving to a new, technologically updated platform (CPC 2.0) for faster ITR processing. ITRs for AY 2020-21 will be processed in CPC 2.0. We appreciate your patience as we migrate to the new system. “
The tweet did not mention any timeline for when it will migrate to CPC 2.0 and begin processing IT returns for AY20-21. All income tax returns filed with the department are processed at the CPC or centralized processing center of IT department in Bengaluru from now on.
Under the CPC 2.0 project, the tax department is expanding its capacity and updating technology to provide better services to taxpayers through pre-filled forms and reducing the time for refunds.
Some of the public accountants mint He spoke also confirmed that most of his clients have yet to receive refunds for FY19-20 or AY20-21. “Yes, many of my clients who have filed their income tax returns for fiscal year 2019-20 3-4 months ago have yet to receive refunds,” said Swar Pathak, a public accountant based in Ludhiana.
Sudhir Kaushik, CEO of Taxspanner.com, an income tax filing platform, confirmed that there appears to be a delay in issuing refunds for the 2019-20 fiscal year. “Even those clients who filed income tax returns in June-July this year have yet to receive refunds. Generally, tax refunds are issued in a 2- to 4-month period,” he added.
In a recent tweet, the IT department said it has so far issued ₹1,36,066 crore to more than 40.19 lakh taxpayers between April 1, 2020 and November 17, 2020. This includes personal income tax refunds of Rs. 35,750 crore issued in 38,23,304 cases and corporate tax returns of ₹1,00,316 crore issued in 1,95,518 cases. Many taxpayers responded to the tweet and complained about not receiving the refunds.
According to some experts, the delay could possibly be due to covid-induced outages, which has put the treasure to the test.
“Generally, refunds are automatic and are received within 3-4 months after the filing of income tax returns in case there is no material deficiency in the return. However, this year we understand that the government has a liquidity crisis due to extra spending due to the covid-19 crisis and also the collection has been moderate. This could be a possible reason for the delay. Now, with economic activity on the rise and GST collections also becoming robust, the CBDT should plan to process refunds of less than 1 Lakh, “said Vivek Jalan, Partner at Tax Connect Advisory Services, a tax advisory firm based in Calcutta.
Some experts also believe that the tax department should provide more transparency by giving the timeframe for which refunds have been issued.
“To increase transparency, the CBDT must process the returns in chronological order and disclose the details of the date up to which the income tax returns were filed and, accordingly, the refunds were processed and issued. A panel on your website that shows the date until which refunds were issued, the date and number of acknowledgment of receipt of the returns processed and the number of returns filed and pending processing will be helpful to taxpayers and provide transparency. said Ved Jain, former president of the Institute of Chartered Accountants of India (ICAI).
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