What is income tax refund?
While filing an income tax return, total income from all sources is computed. This total income is termed as Gross Total Income and such income is further reduced by tax saving investments/deductions, if any, and thereafter Net taxable income is derived.
Calculation of final tax is done on the Net taxable Income. The final tax liability is computed after due consideration of TDS, TCS, advance tax paid.
While doing the calculation of taxes, the tax computation will result with three possible scenarios which are as under:
1.Tax refund
2.Tax liability
3.No Tax Payable/Refund
What is Tax refund?
Tax refund is the case where excess taxes have been paid or excess TDS was deducted on an individual’s total income. The only way to claim refund of these excess deductions/payments is by filing your tax returns.
When exactly does the Tax refund be issued?
After filing ITR, the ITR needs to be e-verified. Once the verification process is completed the ITR filing process stands to be completed. Further, the ITR filed goes into the Processing stage.
When the ITR processing is complete, the IT department issues Intimation u/s. 143(1) on the registered email ID of the taxpayer.
In such intimation there are comparative columns such as, “As provided by the taxpayer in the return of income” versus “As computed u/s. 143“.
Intimation u/s. 143(1) is a sort of preliminary assessment for any discrepancies evident in the ITR form. Based on the calculations in the intimation the final tax payment/tax refund due can be ascertained.
Refund is issued only when the ITR processing is duly completed, and the said tax refund amount is also validated by the IT department in the intimation copy.
Reasons behind refund not yet received?
1. Delayed filing of income tax returns
2. Income tax return is under processing stage
3. Errors while filling the ITR forms
4. Refund was issued but it got adjusted against previous years outstanding demands
5. Refund was issued but the bank account selected for receipt of refund is not pre validated/not active
6. Response to valid claim of refund not submitted. This response must be submitted within 30 days in the worklist section of the income tax account.
How to check the refund status?
1. Check the Filed income tax return status: Login to IT account – Efile – Income tax return – Check the assessment year – Check status.
2. Check the refund status on NSDL site: https://tin.tin.nsdl.com/oltas/refund-status-pan.html
Steps to follow on tax refund not received.
1. Check the refund status
2. If the refund has got adjusted against previous year’s tax demands, check whether these demands were right and subsequently correct adjustment has been done
3. For erroneous adjustment of refund against demands, submit online response/file online rectification, as the case may be
4. Filing of e-grievances to concerned assessing officer/CPC
5. If there was a mistake while filing the original return then revise return needs to be filed
6. In case of refund failure, raise refund reissue request
7. Check whether your bank account pre validation is completed. To check this Login to income tax account – My profile – My Bank Account – Check status. If pre validation is not completed the Add the bank account and complete it
Summary
Post ITR filing, one has to patiently wait for the issue of tax refund. Generally, the processing period is 7-120 days with an average time of 90 days post everification of ITR is completed.
Each year the tax department is trying its best to expedite the processing period of ITR filed.