If you delay paying your income tax or miss deadlines, you may face penalties and could receive an income tax notice. When it comes to refunds, the process can sometimes be slow — it’s not unusual for refunds to take several months, leading to confusion and frustration among taxpayers.
In this guide, we’ll address some common questions related to income tax refunds and refund status, including:
Why income tax returns are filed
How to claim a refund
Steps to take if you haven’t received your refund
What to do if your refund cheque is lost
Let’s dive in and clear up the confusion around your income tax refund!
How to Check Your ITR Refund Status
If you’ve filed your Income Tax Return for the current financial year and are expecting a refund, you can easily track the status of your refund online.
For those who filed their returns electronically, the refund status can be checked online through the official portals.
To check your refund status, you’ll need your PAN card number and the relevant assessment year. It’s recommended to wait at least two to three weeks after filing before checking the status.
Income Tax Refund Status – Customer Support
You can also check the status of your tax refund by contacting the customer support team through the following toll-free numbers:
For e-filed return refund queries: 1800-425-2229
For general filing and refund queries: 1800-180-1961
For banking-related issues and queries: 1800-425-9760
How to Claim Your Income Tax Refund
To make the refund process smoother, it’s advisable to include all your eligible investments—such as life insurance premiums, house rent, equity, NSC/mutual fund contributions, fixed deposits, tuition fees, etc.—in your Form 16 while filing your Income Tax Return. Make sure you attach all necessary supporting documents with your return.
If you missed declaring some investments and ended up paying extra tax, you can still claim a refund by filing Form 30. This form is a formal request to reassess your case and refund any excess taxes paid.
Remember, you must file your refund claim before the end of the relevant financial year, and it should be accompanied by the prescribed return as per Section 139 of the Income Tax Act.
Due Date to Claim Income Tax Refund
Income tax refunds must be claimed within one year from the end of the assessment year. However, under specific conditions, assessing officers may consider refund claims filed after the due date. If you miss filing your Income Tax Return (ITR) on time, you can still file a belated return up until December 31st.
Key Points to Remember:
Refund claims will not be accepted if six consecutive assessment years have passed.
The refund amount should be less than Rs. 50 lakh for a single assessment year.
Late refund claims do not accrue any interest.
If delayed claims require verification, the assessing officer may reconsider the claim.
Who is Eligible for Income Tax Refund?
There are various situations where you may be eligible for a tax refund, including:
If the advance tax paid via self-assessment exceeds the tax payable based on the regular assessment.
If the tax deducted at source (TDS) from salary, interest, dividends, or securities is higher than your actual tax liability.
If your tax liability decreases due to the correction of errors in the assessment.
If the same income is taxed both in a foreign country and in India under a double-taxation avoidance agreement.
If you missed declaring tax-saving investments and deductions while filing your taxes.
If after accounting for the taxes paid and eligible deductions, the tax paid is negative.
What is the Refund Amount I Will Get Back?
To determine your refund, calculate your tax liability. If the taxes paid exceed your tax liability, the difference will be refunded to you.
How is the Income Tax Refund Processed?
The Income Tax refund is processed by the Centralized Processing Centre (CPC) in Bengaluru. Once you submit your ITR, the authorities will process the refunds. If you are eligible for a tax refund, the refund orders will be issued and sent to your bank via the IT refund banker.
You can track the status of your refund online to get updates.
How is the Payment of Income Tax Refund Made?
Refunds can be processed in two ways:
Direct Transfer to Bank Account:
The most common method, where refunds are transferred directly to the taxpayer’s bank account via NECS/RTGS. Ensure that your bank details are accurate in your ITR to facilitate a smooth transaction.Refund via Cheque:
If the bank details provided are incomplete or incorrect, the tax authorities will issue a cheque in your name, which will be sent to your address via speed post.
How Do I Track My Income Tax Refund?
To track the status of your refund:
Refund via Direct Transfer:
Check your refund status online by visiting the official Income Tax Department website (http://www.incometaxindia.gov.in) or the NSDL-TIN website. Enter your PAN number and the assessment year to track your refund.Refund via Cheque:
If you opted for a cheque, you can track the delivery status using the reference number provided by the Income Tax Department. The cheque will be sent through speed post.
Interest on Delayed Income Tax Refund
As per Section 244A of the Income Tax Act, if there is a delay in processing your refund, the department is liable to pay interest at the rate of 6%. The interest is calculated from the date of tax payment to the date when the refund is issued.
For example, if you claim a refund of Rs. 10,000 for the assessment year 2020-21 and receive it in March 2021, the interest will be calculated from April 2020 to March 2021.
How to Update Details with Income Tax Department
To update your contact or bank details:
Visit the official Income Tax Department website.
Log in with your credentials.
Once logged in, navigate to your dashboard.
Update your relevant information (e.g., bank details, contact info).
This ensures that the central TIN (Tax Information Network) database is updated, facilitating the smooth processing of your refund.
How to Apply for Refund Reissue
If there is an issue with your bank account or address details, causing a delay in your refund, you can request a “refund reissue.” Here’s how:
Log in to your Income Tax account.
On your dashboard, click on the “Pending Actions” section.
Select the “Refund Reissue” button.
Click on “Create Refund Reissue Request.”
Choose the bank account where the refund should be sent.
Click on “Proceed To Verification.”
Provide an Electronic Verification Code (EVC).
Submit the request.
The status of your refund reissue will be visible on your dashboard.
Whom Should I Contact for Refund-Related Queries?
If you have any queries regarding your income tax refund, you can reach out to the following resources:
Aayakar Sampark Kendra (Toll-Free Number): 1800-180-1961
For general queries related to the refund of excess tax.Refund or Record Modifications (Toll-Free Number): 1800-425-2229 or 080-43456700
For inquiries related to refunds or modifications in the refund record for returns processed at the Centralized Processing Centre (CPC), Bengaluru.Payment-Related Queries: 1800-425-9760
For issues related to payments, it is advisable to contact the SBI Contact Centre.
How Do I Rectify Mistakes in the Name or Account Number on the Refund Cheque?
If you notice any errors in your name or account number on the refund cheque, follow these steps:
Return the Cheque: Send the incorrect cheque to the CMP Operations Centre at the following address:
Address: State Bank of India, Survey No.21, Opposite Hyderabad Central University, Main Gate, Gachibowli, Hyderabad – 500019.
Include a request for cheque cancellation in your communication.
Write a Letter: It is recommended to write a letter highlighting the mistake and providing the correct details that need to be updated.
Online Rectification: Alternatively, you can modify your name and account number online through the official Income Tax Department website:
Log in to the portal, follow the necessary steps, and update your details.
Once the updates are made, a new refund cheque will be issued and sent to you.
Calculation of Income Tax Refund
The formula to calculate your Income Tax Refund is:
Income Tax Refund = Total Tax Paid – Total Tax Payable
To calculate your refund, consider all taxes paid during the year, including:
Advance tax
Tax deducted at source (TDS)
Tax collected at source (TCS)
Self-assessment tax
If the total tax paid exceeds your tax liability, you are eligible for a refund. You can also check your refund status online to track the process.
Example Calculation:
Taxable Income (A): Rs. 5,00,000
Gross Tax Liability (B): Rs. 12,875
Less: Foreign Tax Credit (if applicable): Rs. 1,000
Net Tax Liability: Rs. 11,875
Add: Interest on Tax Liability (Sections 234A, 234B, and 234C): NIL
Total Tax Liability: Rs. 11,875
Less: Taxes Paid (C): Rs. 25,000
Tax Refund: Rs. 13,125
In this case, since the taxes paid (C) are greater than the tax liability (B), you are eligible for a refund of Rs. 13,125. However, if the taxes paid (C) are less than the tax liability (B), you would need to pay the remaining amount. Keep track of your refund status online for updates.
6 Common Reasons for Not Receiving Your Income Tax Refund
Even after filing your tax returns, there could be several reasons why your income tax refund hasn’t been issued yet. Here are the top reasons:
Income Tax Department Hasn’t Processed Your Refund Yet
If your refund is delayed, it may simply be because the Income Tax Department has not yet processed your return. Be patient and wait for a few weeks before checking your refund status. Additionally, ensure that you submitted your ITR-V (Income Tax Return Verification) within 120 days of e-filing. If you missed this deadline, the process will have to be restarted.Filing Taxes Offline
If you filed your return offline, your refund may take longer to process. While the paperwork is being processed, you can still check the status online after a few days to see if your refund has been approved.Incorrect Bank Details for Refund
If there’s a mistake in your bank account number or if your bank account has changed, your refund might not be processed. In this case, update your new account details and MICR code with your Assessing Officer to avoid further delays. You can find your Assessing Officer details on the official website.Incorrect Mailing Address on Form 16
If you entered the wrong address, your refund cheque might be returned undelivered. Verify your speed post reference number on the NSDL/TIN website. If the address is wrong, you can update your details through the portal after filing your taxes and receiving the refund.Not Requesting a Refund
Sometimes, taxpayers mistakenly don’t request a refund or make an error in the income or deduction claims. If you need to correct or request a refund, you can do so online. In case of confusion, it’s advisable to consult with a tax expert.Incorrect Tax Calculations
If your calculations are incorrect, the Income Tax Department will notify you. Discrepancies can result in the denial of your refund claim. In some cases, they may ask you to pay additional taxes. Recheck your calculations, keep supporting documents ready, and if necessary, pay the additional tax to resolve the issue quickly.
What is an Income Tax Refund?
An income tax refund occurs when you’ve paid more tax than your actual liability for the year. For example, if your employer deducts more tax than required, you are eligible for a refund. Essentially, the government returns the excess tax that you’ve paid once your tax return is processed.
Income tax refunds are based on the difference between the tax you’ve paid and your tax liability. If your request is approved, the government will issue a refund.
Income Tax Filing and Tax Refunds
The government urges taxpayers to file their returns on time (typically by 31st July, but often extended). To be eligible for a refund, you must file your tax return by submitting Form 16 and accurately reporting your income and taxes paid. The income tax software will automatically calculate whether you’re entitled to a refund based on the Tax Deducted at Source (TDS) and your actual tax liability.
Once your return is filed, the process for issuing the refund begins. It typically takes 2 to 3 weeks for your refund status to change, and refunds are usually credited within 4 to 5 months after filing.
Modes of Income Tax Refund
The Income Tax Department processes refunds through two main modes:
RTGS/NEFT
Refunds are credited directly to your bank account. For this, you must provide accurate bank details, including your 10-digit account number, MICR code (provided by your bank), and your communication address.Cheques
If you opted to receive your refund via cheque, the cheque will be sent to your registered address. Any mistake in the address will lead to the cheque being returned. Make sure to provide the correct address while filing your taxes.
Top 6 Reasons You May Be Eligible for a Tax Refund
There are several situations in which you may be eligible for an income tax refund:
Excess Advance Tax Paid
If the self-assessment tax you paid exceeds the tax payable based on the regular assessment, you are eligible for a refund.Excess TDS Deducted
If the TDS deducted from your salary, interest, or other payments is higher than the actual tax payable, you can claim a refund.Tax Reduction After Error Correction
If the tax liability determined through the regular assessment is reduced due to error resolution, a refund may be issued.Double Taxation
If the same income has been taxed both in India and a foreign country under a double taxation avoidance agreement, you may be entitled to a refund.Unreported Tax-Eligible Investments
If you have tax-saving investments that you failed to report while filing, you may qualify for a refund. Make sure to submit the relevant documentation.Negative Tax Paid After Deductions
If your tax payment, after considering deductions and rebates, exceeds your actual liability, you can claim a refund.
What Does My Refund Status Mean?
When checking your refund status, you may encounter the following terms:
No E-filing for Current AY
This means no Income Tax Return has been filed for the current Assessment Year. Ensure you are checking for the correct year (e.g., FY 2022-23 corresponds to AY 2023-24).Under Processing
Your return is still being processed by the Income Tax Department. Check back in about a month for updates.Refund Issued
Your refund has been processed and issued either via cheque or direct bank transfer. Track your refund status to confirm.Processed with No Demand No Refund
There is no refund or additional tax due. If you believe you are entitled to a refund, review your filing and consider making amendments.Refund Failure
This suggests that the bank details you provided were incorrect. Update your bank information on the Income Tax portal and request a refund reissue.Case Transferred to Assessing Officer
Further clarification or information is needed from you. Contact the Assessing Officer if you receive this status update.Demand Determined
Your refund claim has been denied due to outstanding taxes. Review your intimation notice and rectify any discrepancies before paying the due tax.Rectification Processed Refund Determined
After rectifying your return, the Income Tax Department has issued the refund.Rectification Processed Demand Determined
Despite rectifying your return, you still owe additional taxes. Pay the required amount within the given timeline.Rectification Processed No Demand No Refund
After rectifying your return, you are neither due a refund nor owe any additional taxes. You’ll receive a revised intimation confirming this status.
