How Much Time Does It Take to File an Income Tax Return (ITR)?

After compiling the information, segregating the incomes, and computing the final tax liability, the next step is to pay your taxes and file the ITR. The Income Tax Return is basically filed to report your income, claim deductions, and declare taxes paid during a financial year. But is it processed immediately? Do we get the claims settled soon or after a stipulated time? How much time it takes to process ITR, and what after that? Let’s answer all of these questions one at a time. 

What Is ITR?

An Income Tax Return (ITR) is a form where taxpayers report their income and tax payments to the Income Tax Department. It must be filed before the specified due date. The applicable ITR form depends on your income source, total income, and taxpayer category, such as individual, HUF, or company. Taxpayers must calculate and pay any tax due before filing. Filing is also necessary for carrying forward or setting off losses from previous years.

The department offers seven ITR forms — ITR-1 to ITR-7 — customized to different income types and taxpayer categories. Selecting the correct form depends on your income sources, the amount earned, and your taxpayer classification. And how much time does it take to file the ITR? The filing usually takes around 30 minutes to complete. However, the income tax processing time differs. 

How To File An ITR?

Step 1:

Log in on the Income Tax e-filing portal using your user ID or PAN, password, and captcha code.

Step 2:

Next, go to the ‘e-File’ menu and select ‘Income Tax Return’ to proceed to the return filing page.

Step 3:

Enter the required details. Your PAN will be auto-filled. Select the Assessment Year (e.g., income for FY 2021-22 corresponds to AY 2022-23), choose the ITR form (ITR 1 or ITR 4), set Filing Type to ‘Original/Revised Return,’ and select ‘Prepare and Submit Online’ as the Submission Mode.

Step 4:

Click ‘Continue’ and choose ‘Online’ under Mode of Filing. Then, click ‘Proceed’ to move forward.

Step 5:

Select your status, such as Individual, HUF, or Firm/LLP. An individual refers to any natural person. A HUF is a family entity taxed separately under the Income Tax Act. A firm or LLP is a partnership or limited liability partnership as defined under relevant laws.

Step 6:

Choose the appropriate ITR form. For online filing, you can select either ITR 1 or ITR 4.

Step 7:

If filing ITR 1, fill in five sections: Personal Information (name, PAN, Aadhaar, contact, and bank details), Gross Total Income (salary, house property, etc.), Deductions (under sections like 80C, 80D), Tax Paid (TDS, Advance Tax), and Total Tax Liability (refund or payable amount). Once you have filled in and rechecked all the details, submit your return.

What Does The ITR Process Look Like?

When you file your Income Tax Return (ITR), the Income Tax Department follows a structured process to review and process it. Here’s how it works:

Step 1: ITR Verification

• The department starts processing your ITR only after it is successfully verified.
• You can verify your ITR either by e-verifying it online or by sending the signed ITR-V form to the Central Processing Centre (CPC) in Bangalore within 30 days of filing. Without verification, the department will not initiate processing.

Step 2: Processing by CPC

• The CPC reviews your e-filed return and cross-verifies the data in your return with its records.
• Once reviewed, an intimation under Section 143(1) of the Income Tax Act, 1961, is generated.

Step 3: Intimation and Notification

• The department then sends the intimation and a message to your registered email ID and mobile number.
• The message generally looks like this: ‘ITR for AY 2024-25 and PAN mnoxxxxx2r have been processed at CPC. Intimation u/s 143(1) has been sent to your registered email ID. If not received, check the SPAM folder.’

Step 4: Intimation Details

• The intimation includes a detailed tax computation based on your return and the department's records.
• This document helps you confirm whether your return has been accepted as filed or if there are discrepancies.

How Many Days To Process ITR?

The time taken to process an Income Tax Return (ITR) in India starts once the return is successfully e-verified. Thanks to recent improvements by the Income Tax Department, processing times have become much faster. For Assessment Year 2023-24 (Financial Year 2022-23), e-verified returns are typically processed within 15-45 days. In fact, for many returns filed in 2022-23, the average processing time was just 10 days.

It’s important to note that these quick timelines apply only to e-verified returns. The process may take longer if you choose the offline ITR-V verification method. These changes can also differ based on the following factors:

• E-verification: Verifying your ITR on time using Aadhaar or other digital methods speeds up the process. However, if you opt for physical verification with the ITR-V form, there may be delays.
• Types of ITR: Simple forms like ITR-1 are processed faster than complex ones like ITR-3, which need detailed checks.
• Discrepancies in ITR: Errors like mismatched income details or missing documents can slow things down, as further review is needed.
• Scrutiny Selection: The Income Tax Department randomly selects some ITRs for detailed scrutiny, which can extend processing timelines.
• CPC Workload: The Central Processing Center’s workload varies during the year. Heavy workloads may cause temporary delays.

What If The ITR Is Not Processed?

If your ITR filing hasn't been processed even after a reasonable time, you can address this in two ways. One option is to use the "Grievance redressal" feature on the Income Tax Department's e-filing portal under the "Grievance" tab. This lets you file a formal complaint with all the details about your unprocessed ITR. Another way is to call the Central Processing Centre (CPC) on their helpline numbers. 

Conclusion

Understanding the ITR processing time and the factors affecting it helps you manage expectations and possibly speed up the process. Filing your ITR online and verifying it promptly can make a big difference. Keeping your records accurate also contributes to a smoother experience. Remember, acting on time and maintaining clear communication are key to resolving any delays or issues that may arise.

FAQs

Ans. The average income tax return processing time ranges between 15 and 45 days. The actual time may differ based on multiple factors affecting the process. 

Ans. No Demand, No Refund: The department accepted your details, and there’s no amount to pay or receive.

Demand Determined: If there’s a mismatch in taxes paid or credits claimed, the department issues a demand. You must pay it within the specified time.

Refund Determined: The department will issue a refund if your return is correct and includes a refund claim. This process usually takes 20-45 days after e-verification but can take longer if ITR V is physically sent.

Ans. To track your ITR processing status on the Income Tax Department’s e-filing portal, do the following-

• Visit the e-filing portal.
• Log in with your PAN and password.
• Go to the “e-File” section.
• Select “Income Tax Returns” and click on “View Filed Returns.”
• Then, click on “Processing Status.”
• The portal will show the current stage of your ITR processing.