ITR filing 2025 review: Refunds get faster even as AIS glitches, delayed utilities test patience

AIS glitches create hurdles

Like the previous years, taxpayers and their tax consultants have flagged errors in the AIS. “In some cases, AIS is showing erroneous transactions. In the case of one of my clients, the statement shows credit card payments worth Rs 83 lakh. The client was also shocked. His credit card limit itself is Rs 2.5 lakh. Even if he had exhausted the limit every month, it would still not be close to Rs 83 lakh,” says chartered accountant Nitesh Buddhadev, Founder, Nimit Consultancy.

In cases where you are certain that your information is correct, chartered accountants recommend submitting feedback on the income tax department portal and going ahead with return-filing on the basis of your data. “Then, we have had a case where joint owners sold a property, and the full value of the transaction is reflecting in both their AIS. We filed our feedback explaining that the information is partially correct and there is a duplication of entries. However, the only reply we received is that the source information was correct,” says Buddhadev.

Also read: ITR 2024-25: Seven common mistakes to avoid while filing income tax returns

CAs flag errors in ITR utilities

Delay in releasing the utilities was one major cause of concern. This apart, CAs say the ITR-2 utility released on July 18 is not yet foolproof. “For example, we have noticed that when there is rebate under section 87A, education cess is getting calculated on the gross tax liability (before deducting the rebate) instead of net liability,” says chartered accountant Himank Singla.

Faster refunds

On the other hand, the return-filing process this year also has some positives. For one, returns of taxpayers who used ITR-1 and ITR-4 (Sugam) were processed quickly and refund issuance was faster too. “Many taxpayers have received refunds within days of filing, a significant improvement over previous years. CPC Bengaluru's turnaround time, particularly for ITR-1 and ITR-2, has been commendable,” says Singla.

Better I-T outreach

Timely, constant communication has led to a rise in awareness among taxpayers, who would have otherwise missed out on disclosing certain incomes. “The income tax department has been nudging taxpayers to make complete disclosures, especially about foreign income and assets. A client of ours informed us about some ESOPs that he had sold in 2023, but had failed to disclose the same in his returns. Your data is shared with multiple reporting entities and shows up in AIS. Ensure that you disclose all your foreign income and assets,” says Buddhdev.

Until FY 2023-24, inaccurate disclosure or failure to disclose foreign assets in the ITR attracted penalty of up to Rs 10 lakh under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Many IT professionals and others who were on deputation abroad have been caught off guard in the recent years for the failure to disclose their foreign bank accounts, ESOPs and pension accounts.

Also read: I-T dept's compliance nudge results in 30,161 taxpayers declaring foreign assets worth Rs 29,000 crore

In the July 2024 budget, Finance Minister Nirmala Sitharaman relaxed the rules. So, from FY 2024-25, non-reporting of movable foreign assets worth up to Rs 20 lakh will not attract penalty. At your end, it’s best to be transparent, make all disclosures and err on the side of caution rather than invite notices later.