The Income Tax (I-T) Department has issued a circular assuring taxpayers awaiting their tax refunds for the financial year 2020-21 (Assessment Year 2021-22) that they will receive their payments by April 30, 2024. The Central Board of Direct Taxes (CBDT) conveyed this message through a notification released on March 1, 2024.
Taxpayers are advised to regularly monitor their email accounts for any communication from the Income Tax department, which will contain details regarding their tax refund, if applicable.
Upon filing a return request at the Centralised Processing Centre (CPC) within the specified timeframe, taxpayers receive an intimation notice under Section 143(1) of the Income-tax Act, 1961, indicating the successful processing of their Income Tax Return (ITR). Subsequently, any eligible refund amount is credited accordingly.
However, some taxpayers have experienced delays in the processing of their ITRs related to income from the financial year 2020-21 (Assessment Year 2021-22).
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The CBDT acknowledged this delay in its notice, stating, "Due to certain technical issues or other reasons not attributable to the assesses concerned, several returns for assessment year (AY) 2021-22, which were otherwise filed validly, could not be processed." Consequently, taxpayers have been unable to receive their rightful refunds within the prescribed timeframe, despite the delay being beyond their control.
The processing timeframe for returns filed until Assessment Year 2021-22 (by March 31, 2022) was one year from the end of the relevant financial year. Therefore, for FY2020-21, with the deadline to file ITRs being 2021-22, the last window for the income tax department to process refunds was until March 31, 2023. Following this timeframe lapse, the CPC cannot process ITRs or issue intimation notices under section 143(1).
Moreover, taxpayers have until March 31, 2024, to submit revised income tax returns for the financial year 2020-21. The Finance Act of 2022 introduced by the Centre allows taxpayers who missed filing their return or failed to report any income to file an updated ITR (ITR-U) within 24 months (two years) from the end of the relevant assessment year, subject to certain conditions.