Waiting for tax refund? AI might cause delays this time

Tax refund status: As the deadline for filing Income Tax Returns (ITRs) approaches on July 31, taxpayers are growing increasingly concerned about the status of their refunds. Adding to the anxiety, a social media post by Anand Luhar, who claims to be a Chartered Accountant (CA), has suggested that tax refunds may be delayed this year due to the Income Tax Department's implementation of a new artificial intelligence (AI) system.

In his post on X (formerly known as Twitter), Luhar, who asserts his affiliation with the Institute of Cost & Works Accountants of India (ICWAI), alleged that the I-T Department plans to use specially designed AI software to scrutinise ITR filings more rigorously. He described this AI system as having the capability to gather and analyse a wide range of financial data linked to an individual's PAN and Aadhaar cards.

AI to scrutinise everything

According to Luhar, the AI will not only assess transactions related to bank accounts but will also examine fixed deposits, interest credits, mutual funds, share dividends, and gains from long-term and short-term investments.

He claimed that the AI would further check for undeclared bank accounts and transactions involving joint accounts, postal accounts, and cooperative banks. Additionally, Luhar mentioned that the AI would cross-reference data with government registries for property transactions and even review social media activity to ensure all declared and filed information is accurate.

Doubts and jokes abound

The post has sparked a range of reactions online, with many users expressing doubts about the authenticity of Luhar's statements. Critics have pointed out that the IT Department’s website itself faces issues, questioning the feasibility of integrating such advanced technology given the current state of online services.

Some social media users have dismissed Luhar’s claims as speculative, demanding evidence to substantiate the alleged AI integration. Others have reacted with humour, suggesting that the department should focus on improving its existing infrastructure before introducing new technology.

How to track your tax refund

To track your tax refund status, follow these steps on the Income Tax Department’s official e-filing website, available at incometax.gov.in. Before you start, make sure your PAN and Aadhaar are linked.

Step-by-Step Instructions:

• Log In: Go to the e-filing portal and log in with your credentials.
• Find 'View Filed Returns': Under the 'e-file' section, select 'View filed returns.'
• Check Status: on 'View details' to access the history and current status of your filed returns.

If your refund has been processed, the portal will provide the following information:

• Mode of Payment
• Refund Amount
• Date of Clearance

Be aware of potential outcomes:

• Your refund may be partially used to settle any pending taxes.
• The entire refund amount might be adjusted if you have outstanding tax dues.
• There’s a chance that your refund could be rejected or fail to be credited to your bank account, with reasons for the failure provided.

For example, if your PAN is not linked to Aadhaar, you’ll be prompted to complete the linking process and pay any penalties under Section 234/H (Rs 1,000).

To prevent delays, ensure your bank account is pre-validated and that the details match your PAN. Verify that there are no errors in the IFSC code and that the account is active, as these issues can cause processing problems.