income tax
Obtaining refunds exceeding Rs. 1 lakh currently necessitates approval from higher authorities. Furthermore, for old paper refunds issued prior to the implementation of the Refund Banker Scheme that have not been received by the assessee, similar higher authority approval is required. This adds complexity to the administrative process, increasing the responsibilities of higher officials. Additionally, these refunds are often delayed for over six months, despite the assessee providing necessary documents such as the bank passbook and an indemnity bond.
To streamline the process, it is proposed that old paper refunds not exceeding Rs. 1 lakh that remain undelivered should be processed without requiring higher authorities' approval. Instead, Assessing Officers should handle these cases, alleviating the backlog of grievances related to non-receipt of refunds.
Assessees often change their addresses for various reasons, such as job changes or marriage. However, many fail to receive their refund cheques because these are sent to their previous addresses. Even when current addresses are reported in Income Tax returns, the refunds frequently go undelivered.
To address these situations, it is suggested that after the Central Processing Centre (CPC) processes the return, the file be transferred to the relevant Assessing Officer. This would enable direct communication and resolution of issues concerning return processing and non-receipt of refund cheques.
The process for granting tax refunds to the legal heirs of deceased assessees can be cumbersome. Many claims remain pending due to the requirement of a Court Order in the department's software (AST), which can take about two years to obtain.
To expedite proceedings, it is recommended that for refunds not exceeding Rs. 50,000 payable to the legal heirs of deceased assessees, the requirement for a Court Order be waived. Instead, the Assessing Officer should be allowed to exercise discretion in granting these refunds.
The speed and volume of refunds issued by the Department in recent years have been commendable. However, to enhance efficiency and improve the assessee's experience, it is suggested that refunds for both e-filed and manual returns be directly deposited into the assessees’ bank accounts within a maximum timeframe of six months from the date of filing.