35 lakh income tax refund cases pending due to bank account mismatch and validation

At present, the Income-Tax Department is grappling with approximately 3.5 million pending refund cases due to issues related to mismatched and unverified bank account details of taxpayers. CBDT Chairperson Nitin Gupta revealed that a dedicated call center has been established to reach out to these affected taxpayers. The department is actively engaging in communication with these individuals, with a primary focus on expeditiously resolving these issues.

“Our objective is to swiftly credit the due refunds into the correct bank accounts of the taxpayers,” emphasized Gupta.

When asked about instances where refunds are stuck, mainly owing to taxpayers receiving demands related to past years, such as 2010-11, Gupta explained that the department underwent a significant technological transition around 2011, moving from paper-based records to computer systems. Consequently, certain older demands have resurfaced in the records of the taxpayers.

To address these challenges, a unique demand management facilitation system was introduced approximately a year ago, targeting cases where refunds are delayed for various reasons. This system automates an email notification to the affected taxpayers, followed by a phone call from a designated number within three days. This conversation helps to efficiently resolve the outstanding issues, Gupta informed reporters.

Direct Tax Collections and New Tax Regime:

Mr. Gupta exudes confidence in the exceptional performance of the department in collecting direct taxes. As of the current date, the department has successfully garnered a net revenue of ₹9.57 lakh crore, encompassing personal income tax, corporate tax, and various other tax categories. Notably, this accomplishment was made possible despite issuing ₹1.50 lakh crore in refunds during the ongoing fiscal year.

Discussing the latest tax reforms introduced in the previous Budget, Mr. Gupta highlighted that a substantial 60% of corporate entities opted for the new tax regime during the last fiscal year. Looking ahead, he anticipates that a significant portion, ranging from 60% to 70%, of individual taxpayers will make the transition to this revamped tax system. This new regime is designed to streamline the tax structure by eliminating numerous deductions while offering a uniform and reduced tax rate.

Budget Projections:

In the budget for the fiscal year 2023-24, an ambitious target of over ₹18.23 lakh crore has been set for direct tax collections. This target represents a remarkable 9.75% increase over the ₹16.61 lakh crore collected in the previous fiscal year. Mr. Gupta’s unwavering confidence in the department’s capabilities suggests that these budget estimates are likely to be surpassed by the conclusion of this financial year in March 2024.