The revenue department will put in place within two years a mechanism to ensure that all returns are processed within 24 hours and refunds issued simultaneously, an official said.
The government has already sanctioned Rs 4,200 crore last month for upgradation of information technology infrastructure of Central Board of Direct Taxes (CBDT) for processing returns, refunds, faceless scrutiny and verification.
Revenue Secretary Ajay Bhushan Pandey said currently refunds are processed online in an automated manner.
In the current year, refunds to the tune of Rs 1.50 lakh crore have been given directly in bank accounts. Now, the system is being further upgraded so that refunds can be received within 24 hours.
When asked about the timeline for implementing 24-hour refund, Pandey told: "We will try to do it as soon as possible, within the same time frame as faceless assessment, within 2 years".
While presenting the 2019-20 interim budget, Finance Minister Piyush Goyal had said the Income Tax Department now functions online and returns, assessments, refunds and queries are all undertaken online.
"Last year, 99.54 per cent of income-tax returns were accepted as they were filed. Our Government has now approved a path breaking, technology intensive project to transform the I-T Department into more assessee-friendly one. All returns will be processed in 24 hours and refunds issued simultaneously," Goyal said.