Income Tax

Income Tax Refunds for AY 2021-22: 1.5 Crore Refunds Issued

The Central Board of Direct Taxes announced that it has processed refunds of more than Rs. 1.54 crores to more than 1.5 crore taxpayers from 1^st April, 2021 to 10 January 2022. It said on twitter that Income Tax refunds amounting to Rs. 53, 689 crores have been issued in a total of 1,56,57,444 cases, & corporate income tax refunds of Rs. 1,00,612 crores have been issued in 2,21,976 cases.

What is Income Tax Refund?

Income tax refund refers to the process through which the Income Tax Department returns any excess tax paid by you during a particular financial year (FY). It happens when the amount of tax paid by you is more than your actual tax liability for that particular FY. Such excess tax can be claimed as an income tax refund under Section 237 of Income Tax Act, 1961^[1].

Please note that the amount of income tax refund claimed by you as a taxpayer by filing ITR is subject to the verification by Income Tax Department.

This also forms the eligibility criteria to get a refund wherein if you have paid tax more than your actual liability for a FY, you will be eligible for a refund. When you file the ITR, the tax department will then process your return and will confirm income tax refund through an intimation notice. This notice is sent to you under Section 143(1) of the Income Tax Act 1961.

 Crediting of the Income Tax Refunds

The income tax refunds are processed by the State Bank of India (SBI). The Bank shall credit the refund to the bank account that has been nominated by the taxpayer while filing the ITR. As a taxpayer, you should mention the correct bank account number and the IFSC code in order to get the refund in a hassle free manner. Moreover, the bank account number needs to be pre-validated in the new tax filing portal, and the account should be linked with PAN.

Tracking Status of the Income Tax Refunds

There are two ways of tracking the status of the income tax refunds:

• One is through the new income tax portal;
• Secondly, through the NSDL website.

Let’s look at both of these methods.

In order to track status through the new income tax portal-

• Visit the website- www.incometax.gov.in and log in to your account by keying in the PAN as the user ID, and your password;
• After logging in, select the ‘e-file’ option;
• Select ‘Income tax returns’ under the ‘e-file’ option, then select ‘View Filed returns’;
• Select ‘View Details’ from the drop-down menu. It will show the status of ITRs that have been filed once they have been selected. It shall also display the date on which a tax refund was issued, the amount that’s refunded, and the date when any refund due for this AY was cleared.

In order to track status through the NSDL website –

• Visit this link- https://tin.tin.nsdl.com/oltas/refundstatuslogin.html
• Then provide your PAN details;
• Select the appropriate assessment year (AY) for which you want to check the status of your refund. The AY for the Financial Year 2020-21 will be 2021-22.
• Click on submit after entering the captcha code. A notice will be displayed on your screen depending on the status of your refund.

Please note that if the income tax refund is credited to your bank account, it will display a message- “Refund is Credited”. It will also display the last 4 digits of the bank account number, reference number as well as the date of crediting the refund.

It may also display the message- “Refund Returned”. This means that the refund has not been credited to your bank account. This could be due to incorrect account number or incorrect IFSC or such other reasons.

Steps to ensure quick processing of Income Tax Refunds

Keep in mind these points in order to ensure that your refunds are processed quickly:

• Carefully check your ITR

Salaried individuals should ensure that the return acquires salary details specified in Form 16 and should match the salary information in Form 26A available on the income tax department website. ITRs are pre-filled with details like your salary and interest on fixed deposits/NRO savings bank details hence ensure that no tampering is done with such information as mismatches will result in delayed refunds.

• Account should be active

Refund is credited only to an account which is validated by CPC even though there is a feature that allows you to add multiple bank accounts for refunds. It is advisable to select only one bank account for refund credit and that account should be active.

• Pre-validated bank account

Only a pre-validated bank account will receive e-refunds. Hence pre-verification of bank account is necessary.

Conclusion

Income tax refunds are processed by the income tax authorities who are present at the Centralised Processing Centre in Bangalore however, the income tax department allows you to track the status of the refund by the comfort of your home. As per the data released by the CBDT, refunds of more than Rs. 1.54 crores to more than 1.5 crore taxpayers from 1^st April, 2021 to 10 January 2022 has been issued.

Read our Article: CBDT extends ITR filing deadline for FY 2020-21