Govt rejects 70% income tax refunds for reason not in control of taxpayers

This is the time of the year when tax payers look forward to getting refunds from the IT Department if eligible. But for roughly seven out of 10 cases, income tax refunds have remained elusive for no fault of the tax payers. The income tax department maintains that it is also not at fault. According to senior taxmen, they reject an overwhelmingly large number of eligible cases every year for what they call the incidence of missing entries. Taxmen at the ground level claim that nearly 70% of individual tax payers face such cases.

To rectify the malady, the tax department has introduced an online system, as part of its customer-connect initiative. Accordingly, tax payers can view an annual income tax statement or Form 26-AS online to locate missing entries or discrepancies with Form 16 themselves, instead of waiting for the IT department to take their own time inform them.

“We want taxpayers to use this facility. It will help them to get refunds on time,” I-T commissioner in Kolkata Gautam Choudhuri told ET.

Tax payers have to register themselves to view Form 26-AS by paying a one-time fee. “The response is encouraging from tax payers in Delhi and once the disparity is identified, we pay refund within 24 hours,” said a tax commissioner in the national capital.

Tax officials said the discrepancy occurs either at the deductors’ end or at the time of uploading the tax-payment details with NSDL, which works for the tax department as an intermediary.

“Many deductors or employers outsource the task of uploading the data with NSDL. We found that incidence of entry mismatch happens to be the maximum when the job is being outsourced,” deputy commissioner Priyabrata Pramanik said.

The tax statement of Form 26-AS works as the basis for giving refunds. The income tax department takes four to six months to settle tax refund related cases. But if there is any discrepancy, then the process take much longer.

“Form 26-AS is the online reflection of Form 16,” said Bratati Mukherjee, income tax commissioner-II in Kolkata. Form 16 is a certificate issued the deductor or employer stating the details of the salary and the tax deducted at source.

Discrepancies in case of refunds up to Rs 25,000 can be rectified manually. Anything beyond that becomes even more cumbersome.

The income tax department plans to encourage tax payers to use the online facility to view annual tax statement more so that the refunds-issue gets settled without delay. The new system is also aimed at improving tax department’s image, something which the department lacks seriously.