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Income Tax refunds – only few of us get on time, while most of us wait for a long time. There could be several reasons for delay in getting your tax refunds: mismatch in the tax paid details, error in bank account details, technical problems at the department, growing number of tax payers, change in mailing address etc.

In our today’s article we shall look into some basic things about tax refunds, the process of tax refund and how you can ensure timely receipt of tax refunds:

When are you eligible for tax refunds?

Normally, employees declare their investments or the details of tax saving investments to their employers at the beginning of each Financial Year (FY). The employer deducts the tax based on the declaration provided by the employees. Failure to declare the investments leads to higher deduction of tax, which in turn results into tax refunds.

Other reasons could be excess deposit of advance tax on other income, change in the housing loan interest repayment, and claiming of deduction for donations at the time of filing the tax returns.

How the refund process works

Once the Income tax return is filed, the income tax department verifies the information and processes the income tax return. If any excess tax is paid, the same is refunded to the tax payer. Ideally, the refund cheque is send via postal mail to your mailing address or the refund amount is credited to your bank account through the electronic clearing system (ECS).

Reasons for the delay in refund

Mismatch between return filed and form 26AS: Mostly the income tax refund is delayed because the amount you claim as taxes paid does not match with the Government’s online record (Form 26AS).

Incorrect bank account details: to avoid any fraud, the details of bank are printed on the refund cheque. And in case of change in operative bank account, the refund is bound to be invalid.

Treaty claim in the tax return: In case of international expatriate employees working in more than 1 country and claiming benefit of DTAA, Centralised Processing Centre (CPC) may re-direct the returns to the respective ward to verify the claim and process the tax refunds. The additional procedure results in delay in issuing refunds.

Non submission of ITR-V within the prescribed timelines: The acknowledgement of filing Income Tax Return known as ITR-V generated while filing of the tax return is to be signed and send to the CPC for successfully completing the filing procedure. The tax return is considered not filed until the ITR-V reaches the CPC.

Mentioning Incorrect Permanent Account Number (PAN) and other personal details (name, assessment year etc)

How can you track your refund?

The ‘Refund Banker Scheme’ introduced in 2007 is now operational all over India and covers returns processed at CPC. As per this scheme, the refunds will be transmitted to the State Bank of India, Mumbai branch for further processing.

Status of refunds, being paid other than through ‘Refund Banker,’ can also be viewed at www.tin-nsdl.com by entering the ‘PAN’ and ‘Assessment Year’.

An individual can track the refund status as given below:
-Visit tin.tin.nsdl.com/oltas/refundstatuslogin.html -Enter PAN -Select Assessment Year -Click Submit

Individual taxpayers can also send emails to itro@sbi.co.in or refunds@incometaxindia.gov.in for any refund related queries.

How to deal with delays in tax refund

If you do not receive your tax refund within a reasonable time frame (normally one year from the date of filing the tax return), you can visit the tax department for a follow up of the refund or you can write a letter to the concerned tax officer. However, if no action is taken by the concerned tax officer, the tax payer can move up the hierarchy and write to the jurisdictional Commissioner.

Important points for a faster refund

  • Verify the tax paid details as per Form 16/ 16A with the Government’s online record (Form 26AS). In case of any discrepancy, contact your employer or the concerned person for the rectification. The Part A of recently notified Form 16 will have the tax paid details as per Form 26AS.
  • Retain all the supporting documents for the investments, deductions and expenditures. This will help hassle-free verification by the tax department and faster processing of tax refunds
  • Provide valid postal address where refund cheque can reach easily.
  • Submit ITR-V within the prescribed timelines.
  • Ensure that accurate bank account details are mentioned in the tax return, like bank account number, MICR code, ECS facility etc.

Ensuring correct details in the tax return, like PAN, name, assessment year etc.

If you take the above precautions, you are very likely to receive your tax refund quickly and without much hassle.

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XPERT CONSULTING – Tax Consultants

E: contact@xpertconsulting.biz

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0 responses to “Income Tax refund – how to ensure a timely receipt”

  1. Jagdish Kumar says:

    Sir,
    I have filed my income tax return for the Asstt. year 2014-15 and ITR-v sent through ordinary post to CPC-Bengaluru well in time, but now I have received the mail from CPC-Bengaluru for not receiving the ITR-V. Now I have sent the same through Speed post. When I check the status of my Return, there is a massage from cpc that ITR-V received after due period.
    Sir My question is how I can get the refund for the above said A.Y. from CPC, when the ITR-V reached at CPC-Bengaluru after 120 Days.

    Bikramjeet
    Ambala Cantt

  2. TANUBEN SUBHASH LADE says:

    Dear Sir/ M’m
    State Bank of India (SBI) credited Interest (i.e.50411) on my Bank FD interest & on such TDS deducted i.e rs.5194/- & issue Form 16A for rs.5194/- for F.Y.2008-09 but SBI not to deposited such TDS amt. as per my Continous follow up with bank. Bank deposited Such TDS amt in the on Dtd.30/01/2013 which now shown in 26AS.
    My query is Here in 26AS in Part A Total amount Deposited Shown RS.55605/- (i.e.50411+5194)& till date such amt. not Refund to me So pls. Suggest How Can I get such amt. pls.give Procedure that I receive such amt.

    Regards

    Tanuben S.Lade
    9028848779
    keyur_lade@yahoo.co.in

  3. PARESH RATHOD says:

    Need to know the Income Tax REFUND Status

  4. k g n varaprasad says:

    Statis of it yr 2014-15 my pan no AQPPK6140G

  5. harish says:

    HOw about holding up of refunds just because the govt has no funds ???

  6. Natabar Panda, Advocate, High Court of Orissa says:

    If the assessee files manual return it is not processed within a year’s time.If he files electronically it is also processed of late.Another aspect that if demand is raised due to mismatch of TDS etc. the AO says you contact CPC-Bengaluru. After processing the demand is transferred to the AO after one year without any justification. No reply is received to the rectification request sent electronically.Some people say – it is done as per secret instruction of the Higher Authorities.Let any small assessee may ask the Department about the fate of his return under RTI Act.

  7. S C Kapur says:

    I agree with Mr. R L Garg. Income Tax Laws needs to be simplified. Why so many if and buts and heads for connections and levying Income Tax.

    Income Tax Department must trust the Assesse in that situation and Refund the amount as claimed. There is no fun in sitting on Refunds as due to work load and reconciliation procedure of Income Tax Department why the assesse should suffer. Ministry of Finance need to set their house / ITO in order
    Regards,

  8. R.L.Garg says:

    If the tax refund is not neing made by ITO despite making it due for payment, what action can be taken. You also know that if you report/ tke up the matter with higher authorities , the concerned ITO will create problem for you in the next assessment. You have to file ITR every year and expose yourself to the same A.O. pl suggest some solid solution or suggest Ministry of Finance to bring amendment in Income Tax Act, now in DTC to punish the concerned A.O.who remains sitting on refunds.

    Secondly the returns are filed on line to Bangalore and they do not process it for years. What remeady is available to poor Tax payer or Assessee

    Pl throw some light on these issues.
    Thanks

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