Income Tax Refund Status
Are you waiting for your income tax refund? Let’s understand various matters related to an income tax refund.
What is 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’.
When can you claim an income tax refund?
The following are situations when an income tax refund can be claimed:
Excess TDS deducted-
The employer generally deducts taxes after considering various documentary proofs provided to him by an employee pertaining to, say, 80C investments, medical insurance premium under 80D, etc. However, there are instances where an employee cannot furnish proof for a few such investments before the end of a particular financial year. Accordingly, the employer goes ahead with a higher deduction. However, the employee can claim the benefit of such investments while filing their return of income and therefore claim a refund of the higher taxes paid,
Certain individuals may not fall within the taxable bracket at all, i.e. their income would be less than Rs 2.5 lakh. Hence, they would not have to pay any taxes. Yet, taxes would have been deducted from their income. This being so, they can claim a refund of the excess tax deducted;
Excess TDS was deducted from your interest income- Banks may deduct TDS on interest accrued on FDs or bonds if the amount exceeds the threshold limit specified in the Income Tax Act.
Excess advance tax paid- The advance tax paid on the basis of self-assessment was more than the actual tax liability for the given FY. This advance tax can be claimed as a refund while filing ITR.
Taxpayers may be called upon to pay additional taxes- The income-tax officers may make certain additions to taxpayer’s income during income tax proceedings. Such additions may be deleted by appeal authorities. Accordingly, the taxpayer will be refunded the taxes he would have paid.
In case of income taxable in more than one countries i.e income is doubly taxed– This situation can arise when a person is a citizen of one country but receives income from another country. However, India has entered into a Double Taxation Avoidance Agreement (DTAA) with many countries wherein the agreement allows you to claim a tax refund if you are a non-resident Indian and your income is taxable in other countries. Any payment of excess tax can be claimed as a refund under this DTAA agreement.
How to claim an income tax refund?
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.
How much income tax refund is received by the taxpayer?
When a taxpayer claims a refund in his return of income, the tax department processes such a return, and the taxpayer receives 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 an assessment done by the income tax department. This refund amount is what the taxpayer would ideally receive from the income tax department.
How to check for refund status?
Once the refund is determined, the same will be processed by the tax department. The status of the refund can be checked either from:
The income tax e-filing portal, or
The NSDL website
Using income tax e-filing portal
Step 1: Visit the income tax e-filing portal. https://tin.tin.nsdl.com/oltas/refund-status-pan.html
Step 2: Log in to your account by entering the user ID (PAN) and password.
