Income Tax Refund – Mystery

With the end of ITR Filing season, now the assessee has starts receiving their claimed refund from Income Tax Department. Individuals who have filed their ITR’s before 31st August, 2019 has almost received their refunds. Because, this time, to lower the interest burden on government treasury, Income Tax department has processed refund cases on Priority basis.

Income Tax Refund

Sometimes queries received from assessee that, they has timely filed their ITR but refund amount has not been received. To resolve their queries, I had already written an article on this issue with the heading Re-Issuance of Income Tax Refund – How to Submit Request Online which is accessible from my profile section, in which reasons of delay in refund received has been described in detail along with its probable solution.

Now I am discussing some Issues, which affects (decrease) your Income Tax refund eligibility, which are as follows

  • Mismatch of TDS Credit, as claim by you and detail available in Form 26 AS
  • You have under reported your Income but department has received details from external sources about this under reported Income
  • You have claimed Excess deduction under Chapter –VI-A, in comparison to its eligibility, which is denied by department while processing your Income Tax U/s 143 (1) of Income Tax Act, 1961
  • Adjustment of this year refund amount, with any previous year Tax Demand

If you have timely filed your ITR and everything is Ok in your ITR, then in normal circumstances, assessee received refund amount within 2-3 months of from the date of ITR Filing. When your ITR is processed an intimation U/s 143 (1) of Income Tax Act, 1961 will be sent on mail id mentioned in your ITR and a SMS is also sent on your mobile number. In this intimation, detailed calculation of your assessed Income and Interest amount along with interest allowed on your refund amount is shown. After processing of your refund, details are sent to refund banker for further processing of refund amount. When you received intimation U/s 143 (1) regarding processing of your refund, you can check status of your refund disbursement on NSDL Portal.

Tax Information Network

Now, I am going to discuss about eligibility of Interest on refund amount. Interest on refund amount is governed by Sec-244A of Income Tax Act, 1961. Interest is payable where any refund arises due to any excess payment of Tax.

Situation 1Refund is claimed out of TDS, TCS and advance tax – means you have paid you’re taxes before the closing of previous Financial Year. In this situation interest is calculated @ 0.5% per month (part thereof) for the period which is as follows:-

  • If return of Income is filed within the due date as prescribed U/s 139 (1) of Income Tax Act, 1961 – then interest is calculated from the 1st day of assessment year to the date on which refund is granted.
  • If return filed after due date – Interest is calculated from the date of furnishing of return of income to the date on which refund is granted.

Suggestion – If you have to claim refund in your ITR, then please file your ITR within due date so loss of interest can be saved.

Situation 2 – Refund is claimed out of self- assessment tax paid U/s 140 A– this situation occurs in exceptional cases, which means you have excess paid your tax liability, reason may be twice payment of same tax amount due to technical issues and now you are claiming refund amount.

  • In this situation interest on refund is granted @ 0.5% per month (or part thereof) from the date of furnishing of return of income or the date of payment of self-assessment tax, whichever is later, to the date of grant of refund.

Exception: No interest shall be granted in above situations, if the amount of refund is less than 10% of the tax as determined under 143 (1) or regular assessment.

Cautions: A common error/malpractice has been observed, especially in case of salaried persons, who without knowing the Income Tax provisions, for the purpose of claiming TDS Refund deducted by their employer claim falls deduction under Chapter –VI –A, which may create problem in near future for them.

In the recent time, Income tax department has identified many assessee who are claiming false deduction. Income tax department is aware about these malpractices, so it is suggested that, become an honest tax payer and contribute in nation building.

False claiming of deduction/ under reporting of income may attract penalties under various section of Income Tax Act, 1961.

This article is for the purpose of information and shall not be treated as a solicitation in any manner and for any other purpose whatsoever. It shall not be used as a legal opinion and not be used for rendering any professional advice. This article is written on the basis of the author’s personal experience and provision applicable as on the date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of other readers.

The Author “CA. Shiv Kumar Sharma” can be reached at mail –shivsharma786@gmail.com and Mobile/Whatsapp – 9911303737/ 9716118384

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Qualification: CA in Practice
Company: Shiv Kumar Sharma & Associates
Location: Delhi, New Delhi, IN
Member Since: 03 Dec 2018 | Total Posts: 21
My Self CA. Shiv Kumar Sharma. I am a member of "The Institute of Chartered Accountants of India" since 2012. I have Qualified my B.Com (H) in 2010 And Cleared CS- Executive Exam in June 2013. Currently, I am in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. View Full Profile

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21 Comments

  1. Pulak Bhattacharyya says:

    sir I submitted my ITR 1 on 21 June 19 .Till now no assessment done whereas everification was successfull & also it was accepted on 23/06/19. please advise me.

  2. vinayak singewar says:

    My itr not processed yet, show only everification done.

    I submitted itr before 31 st Aug and not received My refund too.

    What is procedure

  3. M Venkatachalam says:

    My IT processed .Demand was given for payment of further amount. On scrutiny I fond that tds deducted by banK on fd interst not taken into account whereas AS 24 shows the amyof tds. How to resubmit and claim refund instead of tax due demanded by IT department

  4. Saptarshi Mitra says:

    Sir ,I had filed my return well before 31st July,i had received a e mail from Dept that they had refund order us 143(1)&also they had mentioned the sequence no.This mail was received by me on 5th October but unfortunately I haven’t yet received money . Also I have checked NSDL portal where I didn’t find any processing.Please advice

    1. shiv786 says:

      Sir, wait for Some more time. In some cases, they take some times for Processing. As you filed your return within due date, you will get Interest on refund amount @ 6%. So no need to vary. Consider this amount as FDR, which is going to mature Soon

  5. Shonali Kellogg says:

    ITR was submitted on 20th June. All documents etc were in order through CA.
    Till date I’ve not received my refund. What should I do?

    1. shiv786 says:

      Please check whether ITR Processed or not. If ITR is processed and you are not getting refund then kindly share screenshot of ITR Processing status on 9911303737

  6. Parameswaran TK says:

    I filed ITR on time. But did not get refund.On checking status , It was found that the AO has not sent refund order to the refund banker . I sent an e mail to the Assessing Officer, furnishing details of DIN and refund sequence number. Within one week I got the refund. The e mail id of AO can be obtained from the IT filing portal

  7. Pankaj singh says:

    I have filled my ITR through cleartax and then e-verified it through the ITR portal on 30th July 2019and also sent the verification details via post but have not recieved my refund yet. I checked the ITR portal it says the status is everification done successfully. Will i recieve my refund ?

  8. Leela Pillai says:

    I am filing IT Return of my company promoters since last three years. I have observed that if the refund is more, department is hesitating to refund it in time saying refund failure. In two cases, since last two years I am furnishing bank details with IT department for refund. In spite of repeated refund issue requests and complying with all the details, still I am getting refund failure asking for refund reissue request. My question is : since they are having only account which is duly mentioned in the return , why should I make refund reissue request every year.

    1. shiv786 says:

      This time, it is mandatory that, your PAN Number must be linked with Bank Account in which Refund amount is to be credited. Pls Check the same with Back. If still your query is not resolved give us a call – 9911303737

  9. Aloke Kanti Chatterjee says:

    I filed original in 14/6/19.after submiting grievance in October,received notice asking clarification of medical tretment expenses 22971,which was clubed earlier by oversight.sumited revised return on 24/10 and still waiting for messgae/mail for REFUND.find no work pending.sent grievance for delay.kindly advise.

  10. Gurumoorthy says:

    I’d filed my itr (form2) on July 27,2019 and everified it in time. My itr is not yet processed. Should I wait for some more time before raising a request?

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