Income Tax Refunds Surge 474% In Last 10 Years, Double Of Tax Collections
Refunds issued to taxpayers have risen from Rs 83,008 crore in FY14 to Rs 4.76 lakh crore in FY25.
India's taxpayer refunds have grown at nearly double the pace of tax collections in the last 10 years, aided by digital interventions of the Income Tax Department.
Between financial year 2013–14 and FY 2024–25, refunds issued by the tax department have increased by 474%, significantly outpacing the 274% growth in gross tax collections and an 133% increase in taxpayer base.
There has also been an 81% decrease in number of days it takes to issue I-T refunds, decreasing from 93 days in 2013 to just 17 days in 2024, according to sources in the know. The 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 I-T returns.
Digital Infra Aids Taxpayers
Official data shared by the Principal Chief Controller of Accounts (PrCCA) and the Central Board of Direct Taxes (CBDT) showed that between 2013-14 and 2024-25, refunds issued to taxpayers have skyrocketed by 474%, rising from Rs 83,008 crore to Rs 4,76,743 crore. The growth outpaces the 274% increase in gross direct tax collections during the same period, which rose from Rs 7,21,604 crore to Rs 27,02,974 crore.
Notably, the average time to issue tax refunds has plummeted from 93 days in 2013 to just 17 days in 2024 - an 81% reduction that reflects the success of digital modernisation efforts. The transformation is largely attributed to comprehensive digitisation of tax processes.
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.
ITR Filing Soars 133% In 10 Years
The taxpayer base has also expanded significantly, with income tax returns filed growing from 3.8 crore in 2013 to 8.89 crore in 2024 - a 133% increase that demonstrates growing formalisation of India's economy.
The proportion of refunds relative to gross tax collections has risen from 11.5% in 2013-14 to 17.6% in 2024-25.
