Know All About Income Tax Refund

The assessee will get the Income Tax Refund if the taxes paid by him are in excess of his actual liability to pay. In this article, we shall discuss such an Income Tax Refund in detail.

Income Tax Refund

Contents of the Article

  • Income Tax Refunds
  • How to claim Income Tax Refund
  • Interest on Income Tax Refund
  • How to check refund status
  • Adjusting the Refund due with the Income Tax Refund
  • Reasons for Refund Failure

Income Tax Refund

Income Tax Refund is the payment made to the taxpayer, when he pays Taxes via advance tax, TDS, Self-Assessment Tax more than his actual tax liability.

How to claim Income Tax Refund

As per the Income Tax act, the Taxpayer can claim the refund of the excess taxes paid/deducted to him by filing a true return of income of the relevant assessment year within the specified due dates.

After filing the return of income, the income tax department verifies and processes the same to check the genuineness of the return of income. After verification, the income tax department issues the refund to the taxpayer by crediting it to the prevalidated bank account of such taxpayer.

Interest on Income Tax Refund

If the Taxpayer has paid an excess tax amount than he actually owes and such excess tax is 10% or more of actual taxes paid, then the taxpayer is entitled to get interested in such an income tax refund.

As per section 244 of the Income Tax act, the Taxpayer will get interested in Income Tax refund at the rate of 0.5% per month or part of the month (6% per annum) on the refund amount. If the return has been filed within the due date and tax includes the TDS or advance tax or TCS then the Interest shall be computed from 1st April of the assessment year till the date of granting such refund amount and if such refund is due to only self-assessment tax then Interest shall be computed from the date of filing of ITR. In case the return has not been filed within the due date and assessee claims for the refund the interest shall be computed from the date of filing of ITR. However, no refund shall be issued if the refund amount is less than 10% of the taxes paid.

How to check refund status

A taxpayer can check his refund status online either by visiting the NSDL website (https://tin.tin.nsdl.com/oltas/refund-status-pan.html), which means at this website, you can check the status of refund without login to your account. You just have to enter the PAN number and the assessment year; or

  • by logging into the Income Tax e-filing portal.

At the aforesaid NSDL site, the taxpayer needs to enter and submit the PAN, relevant assessment year and captcha image, after submitting such details a screen shall be displayed containing the details of refund status.

Practically, it is seen that the assessee gets the refund within a period of 40 to 45 days from the date of filing of return of income. However, if you did not receive the refund then you may even send the request for a refund by log in to your account at the income tax website.

Adjusting the Refund due with the Income Tax Refund

If in case the taxpayer has any outstanding dues from the earlier assessment year/years, the assessing officer by giving an intimation notice u/s 245 of the income tax act, adjusts such outstanding tax dues with the refund due to the assessee.

If the assessee does not agree with such a demand notice issued, he has to respond online within a period of 30 days. In case of no response by the assessee within the prescribed period of 30 days, the assessing officer shall proceed forwards to adjust the refund amount as per the notice.

Income Tax Refund

Reasons for Refund Failure

There are few cases where the income tax department processes the refund due to the assessee, but the same has been not credited to the bank account of the assessee. In such cases, the assessee has to request for refund re-issue. Below are the reasons for such refund failure

  • Providing an Invalid bank account number or IFSC Code at the time of filing return of income
  • Closing the Bank account which was provided as the primary account for issuing a refund.
  • Failed to link the bank account number with PAN number.

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