ITR processing by the Income Tax Department witnessed a significant jump on October 17, 2025, with 3,73,510 returns processed compared to just 96,367 returns on October 16. Despite this improvement, the backlog of verified but unprocessed Income Tax Returns continues to mount, reaching 1,06,51,378 as per the latest data from the Income Tax Department.
Processing Speed Increases Nearly Four Times
The Income Tax Department’s processing machinery showed marked improvement between October 16 and October 17. The single-day processing jumped from 96,367 ITRs to 3,73,510 ITRs, representing a nearly four-fold increase in processing capacity. This surge suggests the department deployed additional resources or resolved technical bottlenecks that may have slowed processing on the previous day.
However, this uptick in processing speed does little to address the fundamental challenge facing the tax administration system. With over one crore verified returns awaiting processing, the department faces a significant operational challenge in clearing the backlog before the assessment year closes.
Data: Income Tax Department as on 17 Oct 2025
https://www.incometax.gov.in/iec/foportal
Registration Numbers Continue Steady Growth
The number of individual registered users on the Income Tax portal increased from 13,52,44,097 on October 16 to 13,52,56,809 on October 17. This addition of 12,712 new registered users in a single day reflects the ongoing expansion of the tax base and increasing digital adoption among taxpayers.
The steady growth in registered users indicates that more Indians are entering the formal tax system, either as new taxpayers or as existing taxpayers registering on the e-filing portal for the first time. This expansion of the registered user base places additional pressure on the department’s processing infrastructure.
Verification Numbers Show Healthy Increase
Returns verified for Assessment Year 2025-26 rose from 7,45,93,694 on October 16 to 7,47,29,735 on October 17. This increase of 1,36,041 verified returns in a single day demonstrates that taxpayers are actively completing the verification process, which is mandatory for returns to be considered validly filed.
The verification rate appears healthy, with taxpayers responding promptly to complete this crucial step. Electronic verification through methods such as Aadhaar OTP, net banking, and bank account validation has made this process more convenient, contributing to faster verification rates compared to previous years when physical submission of ITR-V was the primary method.
Filing Numbers Climb Despite Year-End Proximity
The total number of returns filed for AY 2025-26 increased from 7,78,98,423 on October 16 to 7,80,18,909 on October 17. This addition of 1,20,486 fresh filings indicates that taxpayers continue to file returns even as the assessment year progresses.
The continued filing activity at this stage suggests a mix of belated returns, revised returns, and possibly returns from taxpayers who received deadline extensions. The filing momentum, combined with ongoing verifications, creates a continuous inflow of returns into the processing queue.
Processing Backlog Remains Critical Issue
The most concerning aspect of the current situation remains the massive backlog of verified but unprocessed returns. With 1,06,51,378 returns waiting for processing as of October 17, the Income Tax Department faces a substantial operational challenge.
This backlog means that millions of taxpayers who have completed their filing obligations and verified their returns are still waiting for their returns to be processed. Until processing is complete, these taxpayers cannot receive refunds they may be entitled to, nor can they obtain official confirmation of their tax assessment.
Daily Processing Rate Insufficient for Backlog Clearance
Even with the improved processing rate of 3,73,510 returns on October 17, the department would need to maintain this pace for approximately 285 days to clear the current backlog, assuming no new returns enter the verification queue. This mathematical reality highlights the scale of the challenge facing the tax administration.
The processing capacity demonstrated on October 17 represents significant improvement over October 16, but sustained performance at this level or higher will be necessary to make meaningful progress on the backlog. The department likely needs to achieve daily processing rates exceeding 5,00,000 returns to begin reducing the backlog while handling the continuous flow of newly verified returns.
Impact on Taxpayer Refunds
For taxpayers awaiting refunds, the processing backlog translates directly into delayed receipt of their money. Refunds can only be issued after returns are processed and the refund amount is confirmed. With over one crore returns in the processing queue, a substantial number of taxpayers face extended waiting periods for their refunds.
The Income Tax Act provides for interest on delayed refunds, which offers some compensation to taxpayers for the delay. However, most taxpayers would prefer timely processing and quick receipt of their refunds over waiting for extended periods to receive interest on delayed payments.
Comparison Between Two Days Reveals Volatility
The stark difference in processing numbers between October 16 and October 17 reveals significant day-to-day volatility in the department’s processing capacity. Such variations could stem from various factors including system maintenance, resource allocation, technical issues, or operational challenges.
October 16 saw only 96,367 returns processed, a surprisingly low number given the department’s demonstrated capacity on other days. October 17’s processing of 3,73,510 returns shows the system can perform at much higher levels when functioning optimally.
The gap between verified returns and processed returns continues to widen despite processing improvements. With 7,47,29,735 returns verified but only 6,40,78,357 processed as of October 17, the delta of over 1.06 crore returns represents a significant operational gap.
This growing gap between verification and processing stages indicates that the verification process is moving faster than the processing stage can handle. While efficient verification is positive, the processing stage appears to be the bottleneck limiting overall system throughput.
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