Tax Refund: Know More

Income tax return, often known as IT refund, occurs when an Assessee’s tax paid exceeds the amount he is obligated to pay. It is computed in accordance with numerous tax rules and portions of the Income Tax Act of 1961.

Is it necessary to submit an income tax return in order to get a refund?

Filing the Income Tax Return (ITR) is required if a taxpayer wishes to receive an income tax refund for excess tax paid in a fiscal year. If you do not submit the ITR during the appropriate assessment year, you will not be eligible for a tax refund. You cannot check the progress of your IT refund online.

How Do I Get My Income Tax Refund?

To handle income tax refunds, the government currently uses an e-transfer service. As a result, by completing the ITR for a given fiscal year, one might claim a refund. It is essential to ensure that the ITR is electronically verified using OTP or physically verified by mailing a signed ITR-V [2] to the Centralized Processing Centre (CPC) within 120 days after submitting the ITR. In addition, the excess tax paid must be reported on Form 26AS.

The income tax refund will be credited to the taxpayer’s bank account as soon as it is validated by the Income Tax Department.

Which ITR Form should you use to get an income tax refund?

Previously, taxpayers had to complete Form 30 in order to get an income tax refund. You may, however, claim an income tax refund by completing an ITR using the appropriate ITR Form depending on your income.

For example, if your total income from salary, residential property, and other sources is up to Rs. 50 lakh, you may submit ITR Form 1, commonly known as Sahaj. You may choose your ITR based on the source of income, you generated throughout the fiscal year.

How Can I Check My ITR Status Online?

You may check the status of your ITR file by clicking on the following link:

Click here:

To check the status online, enter the PAN information and the acknowledgment number.

How to Check the Status of an Income Tax Refund

You may verify your income tax status for a refund in one of three ways:

1. a) Making use of the NSDL website
2. b) Using the IT (Income Tax) Department’s e-filing site

How to Check the Status of an Income Tax Refund on the NSDL Website

Step 1: Go to the NSDL website to verify the status of your IT refund online:

Click here:

Step 2: On the next screen, enter your PAN and pick the assessment year to continue monitoring your income tax refund.

Step 3: The income tax status for refund will be shown on the screen.

How to Check the Status of an Income Tax Refund Online Using an E-filing Portal

Step 1: Go to the e-filing site by clicking on the following Click here:

Step 2: Sign in to your user account using the proper credentials.

Step 3: Select the ‘View Return/Forms’ option.

Step 4: Navigate to the ‘My Account Tab,’ then choose ‘Income Tax Returns’ from the dropdown menu.

Step 5: Select the acknowledgment number in the first column.

Step 6: It will take you to a website with information about your ITR and income tax refund status.

Income Tax Refund Interest

In many circumstances, taxpayers get an income tax refund that is significantly more than the amount claimed on their ITRs. This difference represents the interest they earn on a tax refund.

According to income tax refund laws, the Income Tax Department is required to pay the interest on the refund if it is 10% or more of the tax paid.

The income tax refund laws are governed by Section 244A of the Income Tax Act, which establishes a simple interest rate of 0.5 percent every month or part of a month on the income tax refund amount.

The interest is computed from April 1 of the relevant assessment year to the date of income tax refund transfer, if the income tax return is filed on or before the due date. If the ITR is submitted after the due date, the interest is computed from the day the return is filed.

If you find an error in the interest calculation on your income tax return, you may file a request for correction online using your user account.

What should you do if your refund is not processed at CPC?

The Income Tax Department makes every effort to guarantee that taxpayers get their income tax refunds within 3 to 4 months after the end of the fiscal year on July 31.

If you have not received your refund after 3-4 months, you should contact the CPC of the IT Department at the following numbers to inquire:

1800 4250 0025

080-2650-0025

Refund Adjustment Against Outstanding Demand

However, there may be instances when a precise tax amount is owed to the taxpayer who is claiming an income tax refund.

For example, you may owe taxes from earlier years yet be entitled to an income tax refund in another. In such circumstances, the IT department may refuse to give you your owed income tax refund.

However, there may be instances when a precise tax amount is owed to the taxpayer who is claiming an income tax refund.

For example, you may owe taxes from earlier years yet be entitled to an income tax refund in another. In such circumstances, the IT department may refuse to give you your owed income tax refund.

READ ALSO: What Documents Do I need to file Income Tax Returns

Frequently Asked Questions Regarding Income Tax Refunds (FAQs)

1. Is the return of income taxes taxable?
2. The amount you get as an income tax refund represents the extra tax you paid. It is not taxed since it is not considered part of your income. The interest you get on your income tax refund, on the other hand, is considered income and is subject to taxes restrictions.
3. What is the deadline for claiming an income tax refund?
4. The whole income tax refund system is dependent on timely ITR filing. As a result, the deadline for claiming the refund is the end of that assessment year. As a result, the deadline to file for an income tax refund for the fiscal year 2020-21 is March 31, 2021.
5. How will I get my income tax refund?
6. When completing your ITR, you must include your bank account information on all of the ITR forms. Once the refund request has been satisfactorily confirmed, the IT department will utilise the information to deposit the tax refund to your bank account.
7. Whom should I contact if I have questions about my income tax refund?
8. For questions concerning an income tax refund, please contact Aaykar Sampark Kendra. You may reach this help centre by dialing 1800-180-1961 or by emailing refunds@incometaxindia.gov.in.
9. What are the exceptions to receiving an income tax refund?
10. Section 238 of the Income Tax Act covers several exceptional instances involving income tax refunds. If a person is unable to collect an income tax refund owing to bankruptcy or death, his legal representative may do so under this clause.