Tax refund claims of over Rs 1.5 lakh cr pending: Jayant Sinha

By: | Updated: March 10, 2016 2:39 AM

Despite the government’s efforts at speeding up tax refunds, claims worth a staggering R1.5 lakh crore are still pending with the income tax department, reports fe Bureau in New Delhi.

Jayant Sinha“As on February 27, 2016, claims of refund amounting to R1,50,529 crore are pending in the income tax returns filed by the taxpayers for various assessment years,” minister of state for finance Jayant Sinha said in a written reply to the Lok Sabha recently. (PTI)

Despite the government’s efforts at speeding up tax refunds, claims worth a staggering R1.5 lakh crore are still pending with the income tax department, reports fe Bureau in New Delhi.

“As on February 27, 2016, claims of refund amounting to R1,50,529 crore are pending in the income tax returns filed by the taxpayers for various assessment years,” minister of state for finance Jayant Sinha said in a written reply to the Lok Sabha recently. A major part of the pending refunds pertains to the current year where returns have been filed in the last few months, he added.

With the Centre paying attention to “ease of doing business”, tax refunds have gained pace in the past two years. The total amount of refunds paid during financial year 2014-15 on account of “processing of returns, passing rectification orders under section 154, giving effect to appellate orders, etc,” was R1,12,188 crore. Up to January 31, it has released refunds of R1 lakh crore to some 1.75 crore assesses.

In a major relief to tax payers, the Central Board of Direct Taxes had in December asked officers to issue refunds of amounts less than Rs 50,000 expeditiously. It had also directed that field officers make refunds of up to Rs 5,000. In addition, it directed that refunds, which also have cases of dues of up to Rs 5,000, may be issued without any adjustment of outstanding arrears.

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The RV Easwar Committee on simplification of the tax regime had recommended in January that tax refunds made more than six months after the returns are filed should come with an annual interest of 12% and refunds delayed by over a year should be paid with interest up to 18%. Currently, the interest on refunds can’t exceed 6%, a low rate which, according to the committee, doesn’t fully offset the opportunity cost of money to the taxpayer, while serving as a perverse incentive for the taxman to delay refunds.

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