With the income tax filing season underway, taxpayers should take note that the average number of days for processing of refunds has come down significantly over the years, even as the value of refunds has risen significantly.  
 
In 2024, income tax refunds were issued in an average 17 days as compared to 93 days taken in 2013, marking an 81% decrease in number of days taken to issue these. The value of refunds also rose significantly by 474% to Rs 4,76,743 crore in FY25 compared to Rs 83,008 crore in FY14.
 
Sources point out that this massive increase in tax refunds and decrease in number of days to issue refunds is due to improvements in tax administration, especially with the adoption of digital infrastructure including end-to-end online filing and faceless assessment that enables faster and more accurate processing of income tax returns.
 
“The introduction of pre-filled returns, automation in refund processing, real-time TDS Adjustments, and online grievance redress mechanisms has led to reduced delays and improved taxpayer experience,” they further explained.

Income tax refunds as a proportion of the gross tax collected also rose to 17.6% in FY25 from 11.5% in FY14. “Growth in refunds as proportion of gross tax collected is a reflection of increased formalisation and voluntary participation in the tax system,” sources said, adding that as the taxpayer base expands and advance tax payments and TDS mechanisms deepen, excess remittances become more common.
 
“The growing volume and share of refunds are thus not merely a statistical trend but a meaningful signal of systemic maturity,” they said.
 
Gross direct tax collections grew by 274% to Rs 27.02 lakh crore in FY25 from Rs 7.21 lakh crore in FY14. There was also a 133% increase in the number of income tax returns filed to 8.89 crore in AY 2024-25 as against 3.8 crore in FY13.