The deadline for filing an Income Tax Return (ITR) for FY23-24 is July 31. While many taxpayers must have filed their returns well in advance, some may be experiencing delays in receiving their refunds. Several factors could be contributing to these delays, including:

Invalid bank account details: According to Yeeshu Sehgal, Head of Tax Markets at AKM Global, one of the most common reasons for refund delays is the invalidation of bank account details provided in the tax portal.

If the bank account linked to the refund is incorrect or inactive, the refund process can be stalled.

Incorrect tax return details: Errors in the tax return itself, such as incorrect personal or financial information, can lead to delays.

Sehgal highlights that discrepancies in reported income or mismatched details with the tax authorities’ records can trigger a review process that prolongs the refund timeline.

Issues with foreign tax credits: Taxpayers claiming foreign tax credits must file Form 67 accurately and on time.

Failure to do so or incorrect information in the form can cause delays.

Incorrect income clubbing: Incorrectly clubbing a spouse’s or minor’s income with the taxpayer’s can result in discrepancies.

Even if Tax Deducted at Source (TDS) credits are transferred, such errors can affect the refund process.

Mismatch with Form 26AS or AIS:

Claimed TDS deductions must match the details provided in Form 26AS or the Annual Information Statement (AIS).

Any discrepancies between these documents and the information provided in the return can lead to delays.

Increased scrutiny and automated processes: As per Sehgal, the income-tax department has increased scrutiny of returns, using AI tools to automate the process.

As Sehgal notes, even minor errors can lead to delays due to this enhanced review.

Steps to address refund delays

To mitigate delays and ensure the refund process, taxpayers should:

Double-check return accuracy: Ensure that all information provided in the ITR is accurate and up-to-date.

Cross-check personal and financial details to avoid discrepancies.

Verify bank account details: Confirm that the bank account details registered on the tax portal are correct and active.

Track refund status: Monitor the status of the refund online through the tax department’s portal. If the refund is rejected, apply for a refund reissue.

Address errors promptly: On identifying any errors or discrepancies, one should address them as soon as possible to expedite the refund process.