Ministry of Finance addressed refund settlements for Income Tax Returns (ITRs) filed for Assessment Year 2024-25. Of the 3.98 crore ITRs claiming refunds, 3.94 crore were verified by taxpayers, making them valid. Refunds were processed for 3.68 crore valid ITRs, with 3.56 crore refunds credited to taxpayers. However, refunds for approximately 12 lakh ITRs failed due to reasons such as invalid bank account details, refunds returned by destination banks, pending adjustments under Sections 245(1) and 245(2) of the Income Tax Act, or PAN not being linked to Aadhaar. Additional delays are attributed to taxpayer responses pending for defective return notices or post-verification issues.
To address these challenges, the Income Tax Department has implemented digital campaigns through email and SMS, urging taxpayers to update bank details and respond to defective notices. Refund claim returns are being prioritized for faster processing. The Ministry clarified that these measures aim to resolve the remaining refund cases efficiently.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO. 253
TO BE ANSWERED ON TUESDAY, THE 4th FEBRUARY, 2025 MAGHA 15,1946 (SAKA)
‘Settlement of ITRs filed’
253. Shri A. D. Singh:
Will the Minister of FINANCE be pleased to state:
(a) whether refunds claimed in all ITRs filed for Assessment Year 2024-2025 have been settled;
(b) if so, whether there was considerable delay in refund settlements this year;
(c) if not, the reasons for refund not being settled so far; and
(d) the efforts made to settle the remaining refunds claims?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) The number of Income Tax Returns (ITRs) relating to Assessment Year 2024-25, where refund is claimed is 3.98 Crore (as on 21.01.2025). Out of this, 3.94 Crore ITRs are verified by the taxpayers and hence, are treated as valid. Out of such 3.94 crore ITRs, 3.68 Crore refund returns are accounted with refund issued. In 3.56 Crore ITRs, refund has been paid to the taxpayers. In approximately 12 lakh ITRs, the refund issued has failed to be credited to the taxpayer’s account.
(b) In view of answer to part (a), the question does not arise.
(c) In approximately 12 lakh ITRs, the refunds issued have failed to be credited to the taxpayer’s account due to the following main reasons:
1. Bank account provided in the ITR is not valid.
2. Refund was sent to the destination bank, but returned.
3. Proceedings for adjustment of refund to outstanding demand u/s 245(1) of the Income-tax Act, 1961 are pending.
4. PAN is not linked to Aadhaar.
5. Proceedings for adjustment of refund u/s 245(2) of the Income-tax Act, 1961 are pending.
In addition, the main reasons for pendency of refunds are as under:
1. Reply awaited from taxpayers in respect of notices issued for defective return and other communications.
2. Other cases, involving variance, are at post verification stage.
(d) Campaigns in digital format through email and SMS are undertaken to inform taxpayers about the pending action needed for crediting the refund to their bank account and for responses to defective notices/ communications issued. Refund claim returns are being prioritized for processing.
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