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IT Department Processes Record Refunds Promptly Using AI & Automation. According to official data released for the assessment year 2024–25, the department has already processed over ₹1.25 lakh crore in refunds, showing a double-digit increase over the same period last year. 

Thenewsdose.com

Delhi/Chandigarh, July 14, Updated: 10.30 AM

In a significant boost to taxpayer confidence and government transparency, the Income Tax Department has recorded a significant surge in the issuance of refunds, powered by advanced technology upgrades, AI-based processing, and automation tools. The faster processing has led to millions of taxpayers receiving their refunds within days, a marked improvement from previous years.

According to official data released for the assessment year 2024–25, the department has already processed over ₹1.25 lakh crore in refunds, showing a double-digit increase over the same period last year. The Central Board of Direct Taxes (CBDT) attributes this jump to the seamless functioning of the new IT portal and rule-based, tech-enabled processing mechanisms.

New Tax Portal and AI Engine at the Core

At the heart of this efficiency is the upgraded Income Tax e-filing portal, which replaced the earlier system in 2021. The portal is now integrated with a centralised processing centre (CPC) that uses AI and machine learning to identify discrepancies, flag risks, auto-verify bank accounts, and match TDS details more accurately.

The use of AI-based risk profiling has significantly reduced the need for manual interventions and processing delays. Refunds that used to take weeks or even months are now being credited within 7–10 working days for most compliant taxpayers.

“More than 80% of verified returns are now processed within 10 days, and refunds are being credited promptly,” a senior CBDT official said, adding that tech-driven transparency has reduced complaints and litigation significantly.

Impact on Taxpayer Trust and Compliance

The quick refund cycle is not just a procedural success; it is also improving taxpayer sentiment and voluntary compliance. Financial advisors note that faster refunds are leading to better liquidity management, especially for salaried employees and small business owners who depend on timely credit.

“There’s been a visible trust shift. When the system works efficiently, more taxpayers feel confident about filing on time,” said tax expert Archit Gupta, CEO of Clear (formerly ClearTax). The streamlined process is also easing compliance for NRIs and senior citizens, many of whom were previously hesitant due to procedural hurdles.

Next Steps: Pre-Filled ITRs, AI for Assessments

The government is now aiming to further expand this tech transformation. Upcoming steps include:

• Pre-filled ITRs for all taxpayers, auto-generated from TDS, bank, and capital gain data.

• AI-powered faceless assessment and appeals

• Integration of refund tracking with mobile alerts and the Digi Locker ecosystem

• Real-time flagging of fraudulent refund claims or duplicate filings

As part of the Viksit Bharat 2047 vision, the CBDT plans to make the tax filing and refund system completely faceless, paperless, and frictionless over the next few years.

 Refund System Reflects a Governance Shift

The surge in income tax refunds is more than a statistical rise — it is a reflection of India’s transition to a digitally empowered governance model, where technology is playing a direct role in citizen service delivery.

By delivering refunds faster, with less human intervention, the IT Department is setting a benchmark for trust-based governance, improving both economic efficiency and taxpayer morale in one of the world’s fastest-growing economies.