90% of income tax refunds issued in 60 days, 1.5 lakh cr cleared

Income Tax Building, Delhi

The government has cleared 98% of income tax refunds below Rs 50,000 in the current financial year, the finance ministry said.

67% of the refunds were issued within one month of filing the return, and 90% were issued within 60 days, the ministry said in a statement.

Typically, tax refunds used to take several months to process, but the implementation of automation, along with easier central government finances have helped the government process the claims faster this year.

Tax refunds are issued when employers, banks and others deduct more tax than required, or deduct tax at source at the rate of 10% without checking applicable tax rates for the person.

The quickest refunds are those where the amount to be returned is less than Rs 5,000. Amounts under Rs 50,000 are also processed relatively fast, while those above that are the slowest to be processed.

Around Rs 1.5 lakh cr has been returned to tax payers so for this financial year, according to the ministry.

When the taxpayer files a detailed report on the income generated by the person during the previous year and the taxes owed by him, the government refunds any excess that it received in the form of tax deducted at source.