The total number of ITRs for AY 2023-24 filed till 31st July are more than 6.77 crore, which is 16.1 per cent more than the total ITRs for AY 2022-23.

The revenue department is poised to roll out a system to cut the average processing and issuance time for tax refunds from the current 16 days to just 10 days, a newspaper report has said. More importantly, the new timeline is expected to be implemented during the current fiscal year.

“In 2022-23, the average time taken for processing tax returns was 16-17 days. It was 26 days in the preceding year, 2021-22. Now we are looking at processing tax returns in 10 days and issuing refunds simultaneously,” the Business Standard quoted a government official as saying

From April 1 to August 21, tax refunds totalling Rs 72,215 crore have already been issued, including Rs 37,775 crore to companies and Rs 34,406 crore to individuals. The gross collection of direct taxes, which includes both personal income tax and corporate tax, stood at Rs 6.6 lakh crore, the report said.

The technology advancement and the implementation of a robust system are facilitating quicker processing of all tax returns.

In the previous fiscal year, there was a notable rise in the percentage of tax returns. Based on the current trends, this financial year, “We are hoping to see a further jump in processing time to the extent that it could further shorten the timeline of the issuing refunds,” another official told the financial daily.

The income-tax department has adopted electronic approach for conducting verifications and assessments of tax returns, and the process is managed via an anonymous back office, staffed by tax experts and officials, with no direct personal interactions between taxpayers and officers, according to the report.

Another official said that the I-T department aims to release refunds as soon as tax returns are processed. This represents a departure from the previous practice of holding refunds of companies to bolster revenue collection.

The tax department is actively working on further upgrading the system with the goal of enabling taxpayers to get their refunds within 24 hours. At present, refunds have been processed within three to four working days for around 10 percent of the returns. Officials are confident that this rapid refund processing will become the standard procedure within the next few years.

“The total number of ITRs (income tax refunds) for assessment year 2023-24 filed till 31st July 2023 are more than 6.77 crore, which is 16.1 per cent more than the total ITRs for AY 2022-23 (5.83 crore) filed till 31st July 2022,” the tax department had said in a statement.