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The due date to file ITR return is 31st July 2022 for non audit cases and for cases requiring audit, the due date is 31st October 2022. The Income tax return filing season is over. Are you waiting for your Income tax refund? Let’s understand various matters related to Income tax refund.
When a taxpayer makes excess payment of income tax to the government against its actual income tax liability for a given year, the excess amount paid is refunded by the Income tax department after due assessment. This refunded amount is known as “Income tax refund”
The following are situations when an Income Tax Refund can be claimed:
Income tax refund can be claimed simply by filing ITR. Please note that the IT department will process the ITR for refund only if the ITR is verified through any of the online or offline modes of sending a signed copy of ITR V. Further the refund from the IT department is subject to assessment/ verification from the IT department. Refund is received only if the refund claim is found to be valid and legitimate.
When a taxpayer claims a refund in his return of income, the tax department processes such return and the taxpayer would receive an intimation from CPC under section 143(1) which will confirm the amount of refund that the taxpayer is eligible to receive. The refund can either match with or it could be higher / lower than what is claimed in the return of income based on assessment done by the income tax department. This refund amount is what the taxpayer would ideally receive from the income tax department.
Once the refund is determined, the same will be processed by the tax department. The status of refund can be checked either from:
Step 1: Visit the income tax e-filing portal by clicking here
Step 2: Log into your account by entering the user id, password, and the “captcha” and then click on “login”.
Step 3: Click on “View Returns / Forms”
Step 4: Enter “Income Tax Returns” against “Select an option” and the relevant Assessment Year (AY) and click on “Submit”. To know more on what is Assessment Year.
Step 5: Click on the acknowledgement number
The income tax refund status appears as highlighted in the below screenshot
Step 1: Click here which takes you to the NSDL website for checking of the refund status
Step 2: The below screen appears where you can feed in details of your PAN, the AY and the image appearing in the screen and then click on “Submit”.
Once this is done, the below screen appears which shows the status of your refund in the following manner
|Refund status||Meaning||Action required|
|Refund paid||ITR filing processed and refund is credited to your account||Check with the bank for the refund received. If not recieved, contact your bank for finding out the issue.|
|No demand No refund||You are neither eligible for any refund nor you are required to be tax.||Review the comparison received from IT department if you have claimed refund and file rectified return if required|
|Refund unpaid||Refund has been accepted by the IT department but was not paid due to error in bank details or address details.||Please update the correct details on income tax portal and raise a refund reissue request|
|Refund status not determined||Your ITR has not been processed yet.||Recheck the status after a few days.|
|Refund Determined and sent out to Refund Banker||Refund request was accepted by IT department and refund banker has been informed||Wait for refund to be credited to account or contact refund banker to know the status of your refund payment|
|Demand determined||Your tax calculation does not match with that of the IT department and an additional tax has to be paid.||Verify the calculation provided in 143(1) to figure out the mismatch/error. In case of error ,make a payment to the IT Department within the specified timeline.|
In case of nil error, file a rectification along with all the supporting information and documents to justify your refund claim.
|Rectification Processed, Refund Determined and Details sent to Refund Banker||Rectification return has been accepted, Moreover, the refund amount has been recalculated and the refund amount has been sent to the bank for processing||Check your bank account to confirm the receipt of refund.|
|Rectification Processed and Demand Determined||Rectification return has been accepted, However, there are outstanding tax dues (tax demand) which needs to be paid within a specified time.||Pay the outstanding tax/ tax demand after cross-verifying all the details within the specified time period.|
|Rectification Processed, No demand and No Refund||Rectified return has been accepted by the Income Tax department. Additionally, you are neither required to pay any additional tax nor eligible for a tax refund.|
A taxpayer can claim income tax refund only when the Income tax return is filed. As the process of claiming income tax refund depends on ITR filing, the time limit for claiming an IT refund is the same. For any AY, the latest time limit for filing your returns and claiming a refund is the end of the assessment year. For example, for AY 2021-22, the last date to claim an income tax refund is 31st March 2022, which is also the last date for delayed filing of ITR for FY 2020-21.
When the taxpayer is eligible for a refund due to any order passed in response to an appeal, then there is no requirement of making a claim for such refund amount as the ITR department will itself credit the amount of refund. In short, there is no requirement for the taxpayer to place any additional request for refund cases related to appeal.
Please note that if the assessment of taxpayers’ return of income was cancelled with a decision to make a fresh assessment, the refund shall become due only after making the fresh assessment.
Section 244A deals with interest on income tax refund and provides for interest at the rate of 0.5% per month or part of the month on refund amount. Such interest shall be calculated from 1st April of the assessment year till the date of grant of refund, if the refund is due to excess advance tax paid or TDS deduction.
Income tax refund is not taxable because it is the excess of tax liability paid from the total taxable income considered for tax liability for a given year, however interest on income tax refund is taxable as income from other sources.
If there is an income tax liability along with a refund , the assessing officer or commissioner can decide to set off the refund amount against the liability.
In respect of any queries related to income tax refund, you can contact income tax department helpline number Toll-Free No. 1800-180-1961 or e-mail at email@example.com. For queries related to any modification in refund processed at CPC Bangalore, you may call on the Toll-free No. 1800-425-2229 or 080-43456700.
There could be various reasons for delay of refunds. We could list some of the reason which could delay the refund :
If you have received an intimation from the Income-tax Department or Refund Banker that the refund processing has failed due to in-correct bank details, you need to follow the below guide. You will have to submit a refund re-issue request in your Income-tax Department’s website login and update your Correct or New bank Account Number.