Who does not likes refund? Refund means you are receiving back the amount which you have already paid. It is like sudden and unexpected windfall which makes a day for you to celebrate. Earlier taxpayer has to visit many times in Income-tax office and has to sought help of professionals to get the refund but now due to advancement in technology and faster processing of returns taxpayers are getting income tax refunds faster. The taxpayer normally files return of income and claims refunds but due to certain mistakes in quoting bank account details while filing return of income and other relevant factors the refund gets failed and the taxpayers receives mail “ALXXXXXX6N – Refund failure – immediate action required”.
2. REFUNDS ARE NOW ISSUED AT FAST PACE
According to the press release by CBDT dated 09 Sept 2022, refund of Rs.1.19 lakh crore have been issued upto 8th Sept 2022 which are 65.29% higher than refunds issued during the corresponding period in the preceeding year. The taxpayers are receiving refund within 30-45 days after return gets processed by CPC, Benguluru.
3. PROCEDURE OF ISSUING REFUND
After filing return of income, CPC Benguluru processes the return and issues intimation u/s 143(1) by either accepting the returned income or by raising demand or reducing refund. If it accepts the returned income then refund is issued within 30-45 days. If it does not accepts the returned income then proposed adjustment u/s 143(1)(a) is raised and taxpayer has to respond giving adequate reply. If the response is accepted by CPC Benguluru then refund is processed. The refund is given along with applicable interest.
4. REASONS FOR FAILURE TO GET REFUND
There are many reasons for refund failure. It may be due to following reasons-
|Bank Account not Validated
|Only pre-validated bank account can be nominated to receive Income tax refund. Just adding your bank account details in income tax portal and mentioning the same in ITR is not sufficient to get refund. You have to now pre-validate your bank account. Pre-validation of bank account means you must have valid PAN registered with e-filing and an active bank account linked with PAN. The contact details (email ID and Mobile No.) as added in efiling portal should also match with bank account for successful validation.
|PAN not linked with bank accounts
|From 1st March 2019, Income tax department is crediting e-refunds to bank accounts linked with PAN. Therefore if PAN is not linked to bank account then refund will not be issued. You have to contact your bank for linking process or you can do it online also through your banking portal.
|Change in IFSC Code due to Merger of Banks
|The merger of banks changes IFSC Code of bank, so the taxpayer has to update IFSC Code and then validate the bank account to get refund. The income tax portal continuously reflects the message under Failed bank account section Please Note : “On account of merger of banks, valid bank accounts may have subsequently got invalidated due to consequent changes in IFSC/Account Number. It is advised to check and re-validate such bank accounts with updated IFSC/Account Number.” It is therefore required to update the details.
|Mobile No. and Email ID not matched with bank account
|The bank account can be validated if Email ID and Mobile No. matches with as specified in bank account. If there is mismatch in contact details then you will see “!” warning symbol next to contact details in your added bank account section. You need to update contact details on e-filing portal to match details registered with the bank.
|Contact branch to update name as per PAN, then re-validate in e-filing portal.
|Return not e-verified
|If return is not verified than refund cannot be processed. E-verification is required to be done within 120 days of filing of returns.
|Account has been closed
|Revalidate the new opened account and nominate it for refund
|Operations in account have been stopped/restricted/put on hold
|Revalidate new account and nominate it for refund
|Refunds in case NRI can be credited to NRO Account and if there is no NRO Account it can be credited to Foreign bank account.
5. TYPE OF ACCOUNT TO GET REFUND
You can get refund in following types of bank accounts-
c) Cash Credit
e) NRO (Non-Resident Ordinarly)
f) Foreign bank Account if NRI do not have NRO Account
6. TIME OF GETTING REFUND
The main concern of taxpayer is “Income Tax Refund kab milega”? The taxpayer visits many times to Income Tax Office and then also he is not getting refund. There is no timeline or deadline to receive income tax refund but the time taken to receive refund in average in different cases are-
|If return is processed u/s. 143(1) with refund due
|Within 30-45 days
|If returned income is not accepted and response to be submitted by taxpayer
|Within 30-45 days of processing of return u/s 143(1) after acceptance of response by taxpayer
|In case of refunds above Rs.50000/-
|Refunds above Rs.50000/- need to follow internal risk management procedure of Income Tax Department, therefore might take 6 months to process
|In case of refund less than Rs.100/-
|You will not get refund of amount less than Rs.100/- . It will be adjusted against your future demand.
|In case of Non-Resident Indian (NRI)
|Within 6 months of processing of returns
|In case of Assessment Proceedings
|Within 6 months of date of Assessment Order
|In case of Appeal Proceedings
|Within 6 months of date of Appeal Effect
7. SOLUTIONS IF TAXPAYER GETS LATE REFUND
The returns filed are processed at Central Processing Unit(CPC), Benguluru which sends refund approval request to Refund banker i.e. State Bank of India and then SBI credits the refund directly to bank account of taxpayer. If you are not getting refund despite all the solutions made by you, you can implement following solutions-
a) Call Helpline number of CPC Benguluru and request to expediate the refund. The Helpline number is 80-61464700, 18004190025. Normally call centre of income tax department does not respond quickly so you have to wait in queue.
b) Submit application in grievance portal.
c) If refund is processed in CPC, Benguluru but SBI has not released refund then you can call on 18004259760 or email at firstname.lastname@example.org.
d) Book complaint at CPC, Benguluru and take complaint no. from them and then follow up.
e) Contact Jurisdictional Assessing officer to get refund.
8. CHECK STATUS OF INCOME TAX REFUND
a) You can check status of your refund by using following link- https://tin.tin.nsdl.com/oltas/servlet/RefundStatusTrack
Enter PAN and A.Y. and you will get status of income tax refund.
b) You can also login to income tax portal and in view e-filed returns section, you can see refund status.
9. MODE OF OBTAINING TAX REFUND
From 01st March 2019, department is issuing only e-refunds where refunds are directly credited to bank account of taxpayer. Earlier all tax refunds for a value of more than Rs.50000/- were issued via cheques through postal department. But due to many complications in delivering the cheques and other hardship faced by taxpayer, ECS system has been introduced where all refund claims are settled through directly crediting bank account of taxpayer. So it is important to always update bank account in return.
10. CERTAIN FAQ
a) How much time does it take to pre-validate my bank account once I have submitted my details? The pre-validation is automatic. Once your request is submitted, it is sent to your bank. The validation status is updated in your e-filing account within 10-12 days.
b) Can I validate and nominate multiple bank account for refund?-Yes, you can pre-validate multiple bank accounts and can nominate more than one bank account for IT Refund.
11. OUR CONCLUSION
The Government is taking various steps to expedite the process the issuing refunds. The returns are also been processed faster. The Govt. is in the process of linking PAN with Aadhar and Bank Account. It is necessary to always update Name, Contact and Address details in Aadhar, PAN, E-filing Portal, Income Tax Returns and Bank Account to get faster refund. There are also many technical glitches in new income tax website which is not allowing raising refund re-issue request. Also in many cases request submitted is not approved by CPC, Benguluru and taxpayer can only reach CPC, Benguluru via toll free number, calling which is again bigger tasks. So as of now not all problems have been solved but to some extent relief is given to taxpayer.
The above comments do not constitute professional advice. The Author can be reached at email@example.com or call us on 9111872247 or visit website www.financialtreecompany.com. My name is CA Divya Agrawal and I am Practising Chartered Accountant, CEO and Founder of FINANCIAL TREE COMPANY (An online return filing and Tax Consultancy Company). We also upload educational videos in You tube and name of our channel is FINANCIAL TREE COMPANY. Our aim is to help people in improving their financial health by spreading knowledge and love. Stay Financially Fit and Healthy.