In a testament to the Government’s endeavour towards automation and simplification in the income tax return refund process and ease of doing business, a whopping 89 per cent of individuals and 88 per cent of firms of a total 3,531 respondents in an industry survey have seen greater reduction in the waiting time for receiving income tax refund. Among the 3,531 respondents, 56.4 per cent were individual respondents and 43.6 per cent were firms/enterprise/organizations level respondents. Of the individual respondents, 87 per cent found the process of claiming income tax refund as convenient and among the firm level respondents, around 89 per cent of them reported the process of claiming income tax refund as convenient.
The CII Income Tax Refund Survey report presented to Finance Minister Nirmala Sitharaman on Wednesday, was the result of an exercise to assess the speed and efficiency of income tax refunds conducted at pan India level in October 2023, wherein the maximum participation steered from the major states. According to R Dinesh, President, CII, the extensive measures which have been introduced by the Government in the recent years to streamline, simplify and automate the taxation regime, have borne rich dividends. This is further buttressed by the fact that the process of checking refund status was reported as smooth among the 84 per cent individual respondents and 77 per cent firm level respondents. For 53.2 per cent of individuals, it usually takes less than a month to receive income tax refund and 48.9 per cent of firm level respondents reported the time taken varies between 1-3 months.
Further, 75.5 per cent of the individuals did not pay excess TDS over and above their estimated tax liability. However, a miniscule percent of respondents, 8 per cent, who were required to pay TDS, ended up paying TDS in excess of tax liability by 10-20 per cent. As per the report, 22.4 per cent of firm level respondents did not pay any excess TDS over and above their estimated tax liability while out of the ones who were required to pay TDS, 19.6 per cent of the respondent firms paid excess TDS in the range of 0-10 per cent, followed by 25.7 per cent of the respondent firms paying excess TDS in the range of 10-20 per cent and 19 per cent of them paying an excess TDS in the range of 20-30 per cent.
An overwhelming majority of respondents – numbering above 90 per cent — including both individuals and firms/enterprises reveals that ITR refund gets automatically generated after filing the ITR. The significant reduction in waiting time to get an income tax refund over the last 5 years by both individuals and firms as shown by the survey results, says Chandrajit Banerjee, Director General, CII, is encouraging as it reflects the Government’s unrelenting efforts to make the process of getting income tax refunds simple and efficient over the years.