Waiting for ITR refund: Check who will get faster refund among ITR-1, 2 & 3

If the taxpayer does not receive the refund in time, they should check for issues with their income tax return and review their email for any messages from the tax department about the refund

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For those who filed ITR-1, ITR-2 or ITR-3 for the fiscal year 2023-24, the burning question is: Who will receive their refunds earlier?

 

Understanding ITR-1, ITR-2 & ITR-3

 

ITR-1 form: Form ITR-1 can be used by an Ordinary Resident (ROR) Individual with a total income of up to Rs 50 lakh. This can include income from salary, income from one house property, and income from other sources such as bank interest, dividends, and agricultural income up to Rs 5,000.

 

ITR-2 form: This form is for individuals or Hindu Undivided Families (HUFs) who do not have income from “Profits and Gains of Business or Profession” and are not eligible for ITR-1. 

 

ITR-3 form: The ITR-3 form is designed for individuals and HUFs engaged in business or professional activities, requiring the maintenance of detailed books of accounts. This includes professionals like chartered accountants, doctors, lawyers, and engineers, whose income is based on actual profits. 

 

As ITR-1 is the most basic of the tax forms, its processing time is typically much quicker compared to other forms. Consequently, refunds are often credited soon after the form is processed. Refund claims for ITR-1 are usually handled faster than those for ITR-2 and ITR-3, reflecting the simplicity of the income reported in ITR-1 versus the complexity in the other forms. Taxpayers who file ITR-1 often receive their refunds within a few days to weeks, provided there are no issues or adjustments. However, filing returns close to the deadline may lead to processing delays, said Adhil Shetty, CEO of Bankbazaar.com

 

Regardless of the ITR form used, several factors can impact the speed of refund processing:

 

Accuracy of information: Errors or discrepancies in the ITR can lead to delays or even rejection of the refund claim.

 

E-verification: Promptly e-verifying your return can significantly reduce processing time.

 

Bank account details: Ensure that the correct bank account information is provided in the ITR to avoid delays in refund credit.

 

TDS reconciliation: Mismatches between TDS claimed and TDS reported by deductors can lead to additional verification steps.

 

High-value refunds: Large refund amounts may trigger additional scrutiny, potentially extending the processing time.

 

How to check ITR refund

 

The income tax refund process can be tracked online through two primary platforms: National Securities Depository Limited (NSDL) website and the official Income Tax Department portal.

 

Checking refund status from the income tax e-filing portal

 

Go to the official income tax e-filing website.

Log in with your PAN details.

 

Once logged in, locate and click on the ‘My Account’ section.

 

Click on the “Refund/Demand Status” button.

 

You will see the status of your income tax refund, including details such as the assessment year, current status, reasons for any refund failures, and mode of payment.

 

Checking refund status from the NSDL website  

 

Visit the NSDL TIN website.

 

Log in with your PAN details.

 

Choose the assessment year for which you want to check the refund status from the dropdown menu.

 

Enter the captcha code displayed on the screen.

 

After entering the captcha, click the ‘Submit’ button.

 

A message will appear on your screen, indicating the status of your ITR refund.

 

Click 'Proceed' to view your refund status