The Income Tax Department was a top Google Trends search topic last week. This surge in interest comes as the Central Board of Direct Taxes (CBDT) has still not issued tax refunds for many taxpayers, even though more than a month has passed since the original tax return filing deadline on July 31, 2024.
Over 15% of ITRs still awaiting processing
According to the Income Tax Department’s website, over 7.51 crore income tax returns (ITRs) have been filed this year. Of these, slightly more than 7.37 crore returns have been verified. However, only about 6.38 crore ITRs have been processed for tax refunds, leaving over 99 lakh ITRs still to be processed. This means that approximately 13.2% of the filed ITRs remain unprocessed.
As a large number of taxpayers are still awaiting their tax refunds, the volume of searches on Google Trends for refund processing status was high last week.
With the deadline to file income tax returns having ended on July 31, taxpayers now have until December 31, 2024, to file belated ITRs. However, they will incur a late fee and interest on any tax due. Similarly, taxpayers who filed their returns before the ITR due date and have not yet received their refunds will be eligible to receive interest on the amount from the Income Tax Department.
Surge in ‘defective ITR’ notices contributing to delays in refunds
Here, we will explore why the tax department has struggled to process nearly one crore returns and why many taxpayers have yet to receive their refunds. One significant reason for this delay is the increase in ‘Defective ITR’ notices issued by the tax department this year.
Also read: ITR processing delays: Reasons why your tax refunds are stuck and what you can do now
A defective ITR refers to incomplete or incorrect information that prevents it from being processed correctly. If the Income Tax Department finds a defect in an ITR, it sends a notice under Section 139(9) of the Income Tax Act to the taxpayer’s registered email or by post. This notice can also be viewed on the e-filing portal.
What should you do if you receive a ‘defective ITR’ notice?
In case you receive a defective ITR notice, you can either file a fresh return or revise the existing one, provided you are still within the assessment year. Alternatively, you can respond directly to the notice under Section 139(9). It’s important to address the notice promptly because missing the deadline will prevent you from filing a fresh or revised return. If you fail to respond to the defective ITR notice in time, your ITR will be considered invalid or ‘not filed’ for the assessment year 2024-25.
Deadline to rectify a ‘defective ITR’
In case you receive a defective ITR notice, you will have 15 days from the date of the notice to respond. However, you can request additional time from the Income Tax Department to rectify the ITR.
Remember, addressing defective ITRs promptly is crucial; otherwise, you risk losing your tax refunds, as the return may be considered invalid. Regularly check your registered email and the e-filing portal to ensure you don’t miss any important notices from the Income Tax Department.