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An individual can take benefit of an income Tax Refund once his tax liability is below actual taxes which he has paid. This happens when the advance tax, self assessment tax paid/TDS deducted is higher than the total tax liability of the taxpayer. This is given out to the taxpayer by the Tax authorities. Let’s understand more of it.
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There are several situations wherein a person becomes eligible for tax refund:
An income Tax refund can be applied for by way of filing one’s return of income. Typically the return filing due date each year is the 31st of July, if not extended by the department. Ensure that you file return on time to avoid penalty.
A person may file their return through uploading the filled form or by providing the required data in online forms.
To know the total amount of income tax one is entitled to get back as a refund, one requires calculating the actual tax liability. If the taxes paid by a person are above his tax liability then the additional taxes gets refunded back to them by the tax department. The income tax calculator can be used to find out the tax liability and the refund that one is liable for.
The tax refund is administered within 2 to 6 months from the date of e-filing of persons return online. The refund may take longer time if one files its return physically.
A tax refund is paid either by cheque or through a direct credit to one’s bank account provided to the department.
In an Assessment Year, the claiming of tax refund for Previous Years is possible for up to 2 Previous Years or Financial Years.
The process to check refund status online, one can visit the website https://tin.tin.nsdl.com. And follow the steps mentioned to see the refund status.
You may be required to provide PAN details, provide relevant assessment year and then you can easily check the refund status.
The validity time period for any refund is a period of 90 days. After this mentioned time, it is marked as expired and canceled.
If the refund cheque issued by Department expires then one can make the Income Tax refund reissue by creating online request from the Tax e-filing portal.
The Income-tax refund won’t be taxable in one’s hands as it is only the receipt of the extra taxes and not the income earned. The income earned is taxable and it is not the tax refunds.
Still, if any person has received the amount of interest on tax then this interest amount is taxable according to slab rates which are applicable to that person. This will be included in the income amount of the year in which the refund is received.
The income refund arises where the employer has done excess TDS deduction on salary or employee has not declared their investment, so at the time of filing income tax returns, need to claim the refund.
Yes, any individual is qualified for interest on the amount of refund payable. Interest on refund is payable if the following conditions are satisfied:
If the return is filed on or before the due date of the assessment year relevant to the financial year for which the return is filed.
The amount of interest is calculated @0.5% per month or 6% per year from the first day of the Assessment Year till the date when the refund is paid to the assessee. Even a part of a month is considered as a full month for interest calculation purposes.
It is important to know that the interest is payable only when the amount due is in excess of 10% of the tax payable by the taxpayer.
No. One can claim the tax refund even though one has filed a belated tax return.
There can be a number of reasons why your tax refund is taking time. The most common reason of all is the fact that you could have entered wrong bank account details in the ITR form.
Always ensure that the bank account specified for refund is pre validated and is also linked with PAN. Other reason for delay could be that there is an error in calculating the refund.
In such a scenario, one needs to contact the Central Processing Centre of the Income Tax Department. It may be a possibility that your return may not have been processed completely. Once files are transferred to the assessing officer, one may follow up for refund.
One should be always aware of scam emails asking for bank details to process income tax refund. Beware of such scam. Don’t fall in the trap of these scamsters.
Read our article:
The Concept of Tax Evasion and Tax Avoidance: Definition and Differences
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
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