Tax Update: If you are waiting for a tax refund, know in how many days the department has to complete the return process..

The last date for filing an income tax return was 31 July 2024. If you have not filed the return yet, then you can file ITR till 31 December. Taxpayers who have filed the return are now waiting for the tax refund.

Many taxpayers have a question in their mind when will the Income Tax Department start the process of ITR and in how many days will the tax refund come? Let us tell you that when taxpayers pay more tax, the Income Tax Department refunds the excess tax amount. After processing the ITR, the department tells whether the taxpayer has to pay more tax or he will get a refund.

If you filed an ITR in July and are waiting for the refund, then you must know how long the ITR process takes.

How long does it take for ITR to be processed?

The Income Tax Department has to complete the ITR process within 9 months from the end of the assessment year. This means that if a taxpayer has filed a return in July, the department has time till December to process the ITR. After the ITR process is completed, if the taxpayer has paid more tax, the department will have to refund.

If a taxpayer has not filed a return by 31 July 2024, he can file a return with a penalty till 31 December 2024. However, the process of late returns will start after 31 December 2024.

Interest is available on tax refund

If taxpayers are eligible for tax refunds, they get interest on it. Interest is given to the taxpayer only when the refund amount is more than 10 percent of the actual tax liability.

For example, if the taxpayer has paid a tax of Rs 20,000 and the actual liability is Rs 15,000, then he will get a refund of Rs 5,000. Along with this refund, he will also get the benefit of interest. This is because the income tax refund of Rs 5,000 is more than 10 percent of the actual tax liability of Rs 15,000.

According to the income tax rules, it is mandatory to pay 0.5 percent interest per month on income tax refund. Interest calculation will be done using the simple interest formula. If the ITR is filed before July 31, then the interest is calculated from April 1 to the date of a tax refund.

On the other hand, in case of late ITR filing, interest is calculated by calculating the time from the date of tax filing to the date of refund issuance.