Income Tax: Now get your tax refunds faster; See how

Updated: 06 Dec 2022, 10:48 AM IST

  • The Income Tax Department has reduced the time allowed for an assessing officer to respond to refund claims from 30 days to 21 days, and has made them responsible for any delays. Additionally, taxpayers can now submit information on the portal regarding stays, instalments and other details granted by courts or other authorities, to ensure incorrect adjustments are avoided.

Income Tax Act’s Section 245 explains the mechanism for set­off of refunds against tax remaining payable.

Income taxpayers will now get their tax refund faster in case of adjustment-related refund claims as the Income Tax Department has reduced the time allowed for the assessing officer (AO) to respond to 21 days from 30 days, reported Business Line

Also, the officer will now be held responsible for any delay caused in the process.

“For the sake of clarity, it is hereby reiterated that if the assessees (taxpayer) either does not agree or partially agrees for adjustment, the matter shall be referred by CPC (Centralised Processing Centre) immediately to the AO who, shall, within 21 days from the date of such reference, provide feedback to CPC as to whether the adjustment should be made or not, and in case of partial adjustment to be made, the amount of demand to be adjusted for each AY needs to be specified in demand portal. If no feedback is received from the AO within 21 days, CPC shall either release the refund without adjustment, or adjust the refund to the extent of demands agreed for adjustment by the assessee,” an instruction issued by Directorate of Income Tax (System) said, as per the report.

Section 245 of the Income Tax Act prescribes the mechanism for set­off of refunds against tax remaining payable. Accordingly, in case of refunds due, on the basis of the demand uploaded, CPC issues prior intimation to the taxpayer to adjust the refund against the correct and legitimate actionable demand due.

In case of grievances against the demand, the taxpayer can approach the AO who, in turn, is required to respond within 30 days by either rectifying or confirming the demand.

However, there have been several issues. The department noticed that sometimes the taxpayers had responded on the demand portal that the demands were incorrect, in as much as the demands were stayed by AO/ITAT/High Court.

So, now the status of stay, instalments, and so on, granted by various authorities/courts, shall be updated immediately on the portal and submitted to CPC, to avoid incorrect adjustments.

First Published: 02 Dec 2022, 11:20 AM IST