The due date to file an ITR return is 31st July 2022 for non-audit cases and for cases requiring an 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 an income tax refund.
When a taxpayer makes an excess payment of income tax to the government against its actual income tax liability for a given year, the income tax department refunds the excess amount paid after due assessment. This refunded amount is known as an ‘Income tax refund’.
The following are situations when an income tax refund can be claimed:
An 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 modes or by offline mode (sending a signed copy of ITR-V). Further, the refund from the IT department is subject to assessment/verification by the IT department. A 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 a 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 the refund can be checked either from:
Step 1: Visit the income tax e-filing portal by clicking here
Step 2: Log in to your account by entering the user ID (PAN) and password.
Step 3: Click on ‘e-File’, select ‘Income Tax Returns’ and click on the ‘View Filed Returns’ option.
Step 4: You can check the status of the current return filed as well as the previous returns filed here.
Step 5: Click on ‘View details’.
The income tax refund status appears as shown 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, the captcha, 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 issued||ITR filing is processed and a refund is credited to your account||Check your bank for the refund received.|
|No demand No refund||You are neither eligible for any refund nor you are required to pay tax.||Review the comparison received from the IT department if you have claimed a refund and file rectified return if required.|
|Refund failure||The refund has been accepted by the IT department but was not paid due to an error in bank details as bank details are not prevalidated||Please update the correct details on the income tax portal and prevalidate the bank account. And raise a refund reissue request|
|Refund status not determined||Your ITR has not been processed yet.||Recheck the status after a few days.|
|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 intimation u/s 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 due||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 the refund.|
|Rectification processed, Demand Determined||Rectification return has been accepted. However, there are outstanding tax dues (tax demand) which need 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||The 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 an income tax refund only when the income tax return is filed. As the process of claiming an 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 31st of December of the assessment year. For example, for AY 2022-23, the last date to claim an income tax refund is 31st December 2022, which is also the last date for delayed filing of ITR for FY 2021-22.
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 the 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.
An 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 an 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 an income tax refund, you submit your grievance on the income tax portal. After logging in to the income tax e-filing account, go to ‘Grievances’ and click on ‘Submit Grievance’. Now, you can submit the details of the query.
There could be various reasons for the delay in refunds. We could list some of the reasons which could delay the refund:
If you have received an intimation from the income tax department and there is a refund failure, 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.