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16 Mistakes to Avoid Delay in Getting Income Tax Refunds

Updated on: 23 Nov, 2023 01:22 AM

Income tax refunds is the most awaited thing after filing your Income Tax Return (ITR).

Why not??

After All it's your hard earned money!! You might have lined up lot of important expenditures in anticipation of your dream refunds.

But, what if your TDS refund is not coming in your account, when everyone around you is getting one??

It's really annoying and frustrating!

Did you know that income tax department is issuing refunds in almost as low as 7 days!

Income Tax Department states many people make silly mistakes leading to delayed income tax refund.

So, today, we will tell you some of the most common reasons leading to delay of your income tax refunds.Make a note of these to get express refunds:

1. Delay in verification of your ITR

Your job does not end only with filing of your income tax return. Verification is an important part of ITR filing. Without verifying your ITR, the income tax department will not start processing your Refund.

2. Delay in filing

No doubt that delay in filing can delay your refunds. If you wish to seek faster refund you are suggested to file your return soon after 1st April, but before the deadline to avoid filing belated return.

3. Filing in extended deadlines

We all come across news for date extension due to heavy traffic on efiling portal on last days. We request you to stop being one among those waiting for date extension and always filling on last dates. As a result of huge amount of filing being done at that time your refund may be delayed.

4. Filing Incomplete return

Refunds can be received faster if you try leaving no incompleteness in return at time of filing. Incomplete return means when an important information is not provided by you while filing your income tax return eg. selection of correct nature of services etc.

5. Revising Your Return

In case you have revised your already filed return . The return will be processed after revision of return. So, revision of return can lead to adding time in realising your refunds.

6. Error in return in computation or details

Computation of tax liability is not a easy thing to do. It can lead to some errors if not done with precision. Any errors made while calculating taxes, can be a cause of delayed refunds or no refunds at all. In case of wrong computation you will either need to revise your return or reply to income tax departments notices. In both cases the process will involve some time and your refund will not be processed by then.

7. TDS mismatch

One of the main reasons contributing to delayed refunds is mismatch in TDS. TDS which you mentioned while filing your taxes does not match with amount shown in 26AS. In case 26AS and your ITR filed does not show same amount, the department seeks clarification.No refunds can be issued before everything matches in the tax department records.

8. Wrong bank details

These days refunds are being received through ECS (electronic clearing system). This has fasten the refund process as time involved in issuing cheques and further presenting them to banks has been surpassed. But, it has on the other hand increased the problems in case you mention wrong bank credentials while filing ITR, the refund will not be credited into the bank. And you will be required to update the details with IT department.

9. Wrong Address

The address disclosed while filing your return is not the updated one. It can add to a lot of delay in issuing your refund. In case department issued some notices which were required to be answered or sent a refund cheque at your address, they will not reach you in time. By the time you find the reason and take the necessary steps your refund will not be processed or will be processed later.

10. Not verifying online

Income tax department has made verifying your return online utmost easy. But, being not a tech savvy person, you still believe in conventional method of verifying your return by post.This won’t make a difference to the validity of your return. But, can surely add more days . For receiving your refund faster, we suggest you to verify return online. So that time involved in posting acknowledgement, sending and receiving of the post and its processing can be eliminated.

11. Wrong selection of ITR form

Selection of appropriate ITR form while filing return yourself is a crucial thing. Wrong selection of ITR form can lead to delay in processing of return, refunds at CPC. So, just give some extra time at the time of choosing the correct ITR form to avoid hardships later.

12. No/ delayed response to notice

Many a times Income Tax Department issues notices seeking clarifications. No response or delayed response to any notice received from income tax department can further add more time in receiving your refunds.

13. Making false claims

If you mention anything which you know to be untrue can lead to delay in your refunds like claiming higher deductions, disclosing lower income etc. While Filing ITR one must pay extra attention that only legitimate and true claims are being made at the time of filing. Tax planning should not be construed with tax evasion.This act will lead to unnecessary litigation leading to delay even in your legitimate refunds.

14. Delay in submitting additional documents required by IT department

Department on finalising your return can seek for any additional documents as it may deem fit. Non-submission or delay in submission of such documents will further delay processing of your refunds.

15. Incorrect tax deposited details

On computation of taxes you found that tax was payable. You duly deposited the tax payable but made a mistake while disclosing it in your yearly income tax return. Such mistake will involve unnecessary time in corrections and confirmations form department. This will again result in increased time in issuing your refund by the tax authorities.

16. Refund adjusted against previous year demand

This is a case where your delay in refund will not be outcome of present actions. Infact your current year return is already processed. But, This refund is adjusted for your last year taxes remaining unpaid. Make sure your taxes for previous years are paid in full so as to receive current year refunds timely.

Tax tip : If you wish to get increased refund, file your return within the due date.The return filed within due date earns more interest but if you file your return after due date, interest will be calculated from date of filing of ITR only.

Knowing the status of your income tax refunds can bring a sense of relief!!

Check Your Income Tax Refund Status Now! Using our free tool you will know the exact status of your refunds!

CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.