Income tax refund is the return amount which a taxpayer can obtain from the Income Tax Department of India. When a taxpayer has paid off a higher amount of tax than which he is actually liable to pay, then he should file for an Income Tax Return and obtain the refund.
Usually, a taxpayer ends up paying a higher amount of tax to the Government under circumstances like advance payment of income tax by self-assessment, TDs deduction done is much more than the liable ones, double taxation, etc. In such cases, the taxpayer can file for an ITR and get back the extra amount which he has paid.
After filing for your ITR, you can continuously track your refund status online. This will help you in keeping touch with the ongoing procedure of refund.
Modes of Refund
There are mainly two modes by which the Income Tax Department performs the refund.
- ECS Method
By the ECS method of refund, the refund amount will be credited into the bank account of the taxpayer. The details about the bank account have to be shared correctly by the taxpayer during filing for ITR.
- By paper(Cheque)
By the paper method, the Income Tax Department will carry out the refund by sending cheque to the mailing address of the taxpayer.
Who is my Refund Banker?
Refund Banker is a scheme started by the Income Tax Department of India. All the refunds that the Income Tax Department will process would be issued to the assessee by one single bank. The one single bank performing all refund issue is the State Bank of India. Hence, SBI is your refund banker.
Reasons for refund not received
There are many reasons for which you may not have received your Income Tax refund yet and are facing delays. Let us have a look at some of them.
- One of the possible causes for the delay in the receipt of refund may be that you might have filed your ITR by physical means and not by electronic means. There may be a time lag during reconciling the details from paper filings and the electronic means. The solution to this reason is to just wait patiently and let the Income Tax department do their work.
- Another possible reason is may be the delay at 2 levels. First level the reason for refund not processed is due to the delay in processing by the Income Tax Department. However, there is another level of delay possible i.e. may be the Income Tax Department has completed the processing of the request but your refund request is still held at the Refund Banker’s end. In this case, also you can have patience and wait for the processing to get completed. You need to make sure that you send the ITR-V to the CPC, Bangalore within 120 days of e-filing of ITR.
- You may not have received your refund on time due to address issues. The address provided by you to the Income Tax Department while filing for ITR might be wrong. As a result, your refund cheque has not reached you yet. You can find out your Speed Post Reference Number from the NSDL website. Then you can get it checked at the Local Post Office and find out the status of the cheque.
- The reason for delay may be that the bank account details which you have shared with the Income Tax Department might be wrong or has changed over the due course of time. So, in case of wrong bank account details you will have to raise a refund re-issue request. But in case of change of bank account details, you need to get in touch with the Assessing Officer for guidance on this.
- Another probable reason for refund not received might be that you have not made any explicit request for a refund while filing for ITR. In such a case, you can revise your submitted return. This can be done easily online without any hassles.
- In case the Income Tax Department finds that the Income-tax refund request is not correct as per their calculations, then in that case it will reject the refund request and will send intimation to you under Section 143(1).
- Your Income Tax refund request might have been rejected by the IT Department as the Department might have found out that you ought to pay them some unpaid taxes instead of any refund. In this case also, you will be receiving an Intimation with the amount to be paid and a copy of the challan.
If you have e-filed your return and you do not receive your tax refund within a reasonable time You should check the year for which you want a refund, whether your ITR-V has been sent to CPC, Bangalore or e-verified.
Return will not be processed till ITR-V is verified.
You may check it on our mobile app for free.
In case ITR-V is already verified, but still there is delay, you can follow up with the Centralized Processing Center (CPC) of the Income-tax Department on 1800 103 4455 or +91-80-46605200 (Monday to Friday between 8 am to 8 pm).
If your return pertains to previous years, where you had filed your return manually then you can write a letter to the Jurisdictional Assessing Officer. Also, attach your Income tax return copies with such letter.
If your refund requests are taking too long to be resolved, you can write a letter to the Additional Commissioner of Income Tax. Moreover, you can even write to the Grievance Department along with the copies of letters written to Assessing Officer and Additional Commissioner. Even if your case is taking too long to be resolved, you can visit the nearest Ombudsman’s office. The Ombudsman will write to the Income Tax Commissioner about your case and it would be resolved soon.
As said earlier, the ITR-V plays the most important role in the processing of an Income Tax Refund request. If you have sent the ITR-V by physical means to the CPC, Bangalore then it is quite essential that you get a confirming receipt from the CPC. CPC is supposed to send a confirmation or acknowledgment via your registered email address. So, it is very important to mention correct email address in your ITR form.
If you have not received your acknowledgment on ITR-V, you need to keep on checking your spam or junk mail folder regularly. You can also check your refund status in the e-filing account and know about the receipt of ITR-V. You need to send another ITR-V within 120 days of filing for ITR if it has not been received for the first time. Taxpayers need to note that the procedure for ITR filing is not complete until the CPC has received the ITR-V.
The processing for refund request begins after the receipt of ITR-V and then the Income Tax Department makes its calculations, validations and depending on these it can issue intimation to the taxpayer under the Section 143(1). The main purpose of the intimation under Section 143(1) is to carry out a proactive refund to the taxpayers or collection of taxes. The intimation under Section 143(1) can show 3 options i.e. no refund no tax payable, tax due or refund due. Depending on this, further action takes place.
Ideally, the refund requests made by the taxpayer should be responded soon. But, usually it takes months together for getting refund issues resolved. In such cases, we need to be patient and follow up regularly about the status of our request. If there are any discrepancies or mistakes, then they should be rectified sincerely.
- How long does it take to complete refund reissue?
Generally, it should take 20 days-45 days from the date of e-verification of your income tax return. But, if you are sending ITR-V by physical means to the CPC then it may take some more time.
- Is the refund obtained taxable?
No, the amount which is received as refund is not taxable but the interest on this amount is taxable.
- Can the refund be adjusted for some other payment?
Yes, the Assessing Officer can adjust the refund obtained for clearing any previous pending tax payment.