Income Tax

How to Claim Income Tax Refund Online?

18 Dec, 2020

Income tax Return is a form through which an individual informs the Government about his Annual Income earned and applicable tax paid to the Government by him. The department has notified 7 forms till date:

ITR 1
ITR 2
ITR 3
ITR 4
ITR 5
ITR 6
ITR 7

ITR should be filed by every taxpayer on or before due dates specified for this. Different forms are filed for different taxable income, i.e. it varies depending upon the source of income, Amount earned as an Income and the category of taxpayers such as it’s an Individual, Company, HUF, etc.

What is the process of claiming Income Tax Refund Online?

Income Tax Refund occurs when the actual tax liability is less than the amount of tax already paid

There is no separate form or process for claiming a refund. One can claim Income Tax Refund Online while filing Return. It is mandatory to e-verify the return by any of the three methods:
Aadhar based OTP
EVC generated through Bank Account
Physical verification by posting signed ITR acknowledgment to the Centralized Processing Centre.
A taxpayer has to e-verify its return within 120 days of filing. The refund is processed after it is completely e-verified. Normally the Income Tax Department takes from one to two months to generate a refund. Once the return is processed by the Income Tax Department refund will be credited to the taxpayer’s account.

Also Read: Things to Know About Income Tax Scrutiny in India

Key Points for Income Tax Refund

Following are the steps for claiming the refund of tax filed in ITR:

RETURN FILING: File an Income Tax Return online by login to the website using User id & password.
E-VERIFY: E-verification of ITR is mandatory for successfully completing an Income Tax Return.
OBLIGATIONS: Filling of Income Tax Return is mandatory for claiming the refund. Without return, one cannot claim a refund.
BANK DETAILS: Proper details of Bank Account such as Bank Name, Account Number, IFSC Code, etc should be properly mentioned as the refund is credited directly to the Bank Account as mentioned in return. If wrongly mentioned, sometimes refund is not generated if bank account details are incorrect.
ORDER u/s 143(1): After the filing of Return, it is processed by the department which takes around 1-2 months to be verified. Sometimes an order is passed by the department reducing the amount of refund as compared to the one claimed in an ITR. Department verifies using PAN number of an individual and cross-checks every information. An individual is given an option of ratifying its refund. Such ratification has to be filed within the prescribed time mentioned in the order. Department also mentions the reason for reducing such refund in the order.
TAN OF DEDUCTOR: TAN of the Tax Deductor should be mentioned correctly. In case of TAN is mismatched or found incorrect, the Department rejects the return filed. In that complete return is required to be filed again with no option of ratification. Earlier there was the option of ratifying only TAN and file it again. But now one has to be very careful while mentioning TAN of Tax deductor.
PREVALIDATION: Prevalidation of Bank Account is mandatory for successful refund. By login to the website, one has to go to their Profile. Under it, there is an option of “Prevalidate Bank Account”.

READ All you need to know about EPF Form 10C

FAQS

How can we check the status of a Refund?

Refund status can be checked online by accessing the ‘refund page’. After entering the PAN, Assessment Year, and Captcha, there will be a page displaying refund status. One can also refer its Form 26AS under ‘Tax Credit Statement’ for checking refund.

Is there any Interest on Income Tax Refund?

Sometimes refund credited to the account is slightly higher than the one claimed on ITR. The difference is interest on such a refund. This interest is paid mandatorily in case if the refund is 10% or more of the tax paid. For more information, visit Enterslice.