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Income Tax Refund


Income Tax Refund

An income tax refund is an amount returned by the government to a taxpayer. The need to provide a refund arises when the tax liability of the taxpayer is less than the taxes paid. The question of making a refund arises in cases where the amount of tax paid by a person is greater than the amount which the assessee is legally obliged to pay. Refund of tax is usually dealt with at the end of the year. In this article, we discuss the process of claiming a refund.

Eligibility for Income Tax Refund

In the specified cases, the individual would be eligible for a refund of Income Tax. The following are the qualifying criterion:

  • In case the amount paid towards tax in view of self-assessment exceeds the actual amount payable
  • In case the tax deducted at source (TDS) from remuneration, interest on securities, debentures or dividends exceeds the tax payable in view of regular assessment
  • In case the tax charged is being reduced due to an error in the assessment process and it has now resolved
  • The Government of India must have an agreement to avoid double-taxation, in scenarios where the same income is simultaneously taxed in India and another country
  • If the taxpayer has speculations which provide tax benefits and deductions that the assessee has not declared in the return of income

Claiming Refund

It is necessary that the Income Tax refund has to be claimed on time. This could be done by filing the income tax return online through the official website. Generally, the due date for income tax return filing is July 31st every year unless the taxpayer has to obtain tax audit or the due date is extended by the Income Tax Department.

Online Income Tax Refund Status Check

We can check the status of income tax refund via two ways namely:

  • Income tax e-filing website
  • TIN NSDL website

On the e-filing website

To check the status of Income Tax refund, the taxpayer must follow the steps mentioned below:

  • Visit the official income tax website:
  • Log on to your account by entering these details: PAN, password, date of birth and captcha code.
  • Click on ‘View Returns/Forms’
  • Select ‘Income Tax Returns’ from the drop-down menu and choose the relevant assessment year for which you want to check the income tax refund status.
  • Click on your acknowledgement number, which is a hyperlink.
  • A pop-up will appear on your screen that will show the timeline of filing of returns such as date and time of filing and verification of ITR,  date of completion of processing, date of issue of refund etc. It will also show information such as assessment year, status, the reason for failure, if any, and mode of payment.

On the TIN NSDL website

You could also check the status via TIN NSDL website. Refund status is displayed on the website, ten days after the refund has been sent by the Income Tax department to the bank. The following are the steps to be followed for checking the status of the refund:

  • Visit the website:
  • Enter your PAN details
  • Choose the relevant assessment year for which the refund status needs to be checked.
  • Enter the captcha code and click on submit. Depending on the status of your refund, a message will be displayed on the screen.

Refund Re-Issue Request

The following steps can be followed in case of re-issuing refund due to errors in processing:

1. Visit income tax e-filing website:
2. Click on ‘My Account’ tab and choose the ‘Service Request’ option.
3. Choose request type as ‘New Request’ and request category as ‘Refund Reissue’.
4. A new screen would appear showing details such as PAN, return type, assessment year, acknowledgement number, communication reference number, and response.
5. Click on ‘Submit’.
6. The system would immediately prompt to submit the taxpayers Bank and address information.
7. The application will then further pass through a verification process using an electronic verification code (EVC) or digital signature certificate (DSC), after which the process will be completed.

Delays in Refund

Delays in refund would be compensated with an interest rate of 6% p.a by the Income Tax Department. Interest on refund amount is calculated from the date of payment of tax to the date of actual payment of the refund. It’s vital that the interest is payable only if the amount of tax refund due is more than 10% of the tax payable by the taxpayer. However, the interest amount for the period will not be paid by the Income Tax Department if the delay is caused by the taxpayer.