Tax refunds surge 474% since 2013, outpacing growth in tax collection and ITR filings: Sources

Gross direct tax collections rose 274 percent in the same period, from Rs 7,21,604 crore in FY14 to Rs 27,02,974 crore in FY25.

Income tax refunds issued by the government have jumped by a staggering 474 percent over the last decade, from Rs 83,008 crore in FY14 to Rs 4,76,743 crore in FY25, sources told Moneycontrol citing official data from the Principal Chief Controller of Accounts (PrCCA) and the Central Board of Direct Taxes (CBDT).

In comparison, gross direct tax collections rose 274 percent in the same period, from Rs 7,21,604 crore in FY14 to Rs 27,02,974 crore in FY25.

According to sources, the number of income tax returns (ITRs) filed has also more than doubled. From just 3.8 crore returns filed in 2013, filings have surged to 8.89 crore for AY 2024-25, marking a 133 percent rise. Including updated returns, the total number of unique PAN-linked filings during FY25 stood at 9.19 crore, reflecting a 141 percent growth.

But the most striking change may be in how quickly taxpayers are getting their refunds. In 2013, the average wait time for a refund was about 93 days. In 2024, it's down to just 17 days, an 81 percent decrease, driven by tech-led reforms in tax administration.

The government credits this transformation to a range of digital initiatives rolled out over the past decade. Key among them: Faceless assessments and end-to-end online filing, pre-filled ITRs using real-time TDS data, automation in refund processing, online grievance redressal platforms.

Tax refunds as a percentage of total gross direct taxes collected have also risen, from 11.5 percent in FY14 to 17.6 percent in FY25.