With the earnings tax submitting season underway, taxpayers ought to take notice that the common variety of days for processing of refunds has come down considerably through the years, at the same time as the worth of refunds has risen considerably.
In 2024, earnings tax refunds have been issued in a mean 17 days as in comparison with 93 days taken in 2013, marking an 81% lower in variety of days taken to challenge these. The worth of refunds additionally rose considerably by 474% to Rs 4,76,743 crore in FY25 in comparison with Rs 83,008 crore in FY14.
Sources level out that this huge enhance in tax refunds and reduce in variety of days to challenge refunds is because of enhancements in tax administration, particularly with the adoption of digital infrastructure together with end-to-end on-line submitting and faceless evaluation that permits sooner and extra correct processing of earnings tax returns.
“The introduction of pre-filled returns, automation in refund processing, real-time TDS Changes, and on-line grievance redress mechanisms has led to decreased delays and improved taxpayer expertise,” they additional defined.
Revenue tax refunds as a proportion of the gross tax collected additionally rose to 17.6% in FY25 from 11.5% in FY14. “Progress in refunds as proportion of gross tax collected is a mirrored image of elevated formalisation and voluntary participation within the tax system,” sources mentioned, including that because the taxpayer base expands and advance tax funds and TDS mechanisms deepen, extra remittances grow to be extra widespread.
“The rising quantity and share of refunds are thus not merely a statistical development however a significant sign of systemic maturity,” they mentioned.
Gross direct tax collections grew by 274% to Rs 27.02 lakh crore in FY25 from Rs 7.21 lakh crore in FY14. There was additionally a 133% enhance within the variety of earnings tax returns filed to eight.89 crore in AY 2024-25 as towards 3.8 crore in FY13.
