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Income Tax Refund – How To Check Income Tax Refund Status For FY 2022-23 (AY 2023-24)?

What is an Income Tax Refund?

An income tax refund is a form of compensation/repayment to a taxpayer when the paid taxes in a given financial year exceed the actual tax liability of that taxpayer for the same year. This kind of refund can only be made for those taxpayers who have been paying obligatory advance taxes or are subject to TDS deductions on their income.

Your possible tax refund can be calculated at the time of filing the ITR. The excess amount paid by you will be transferred to you as a “refund” under Section 237 of the Income Tax Act 1961. However, this refund is only granted once the income tax department verifies the filed Tax Refund application. The exceeded paid tax is not subject to taxation or interest. Therefore, it is recommended to estimate possible tax liability for the financial year early so that you may adjust your advance tax amount accordingly.

Income Tax Refund and Rebate

When read in general, Tax Refund and Tax Rebate appear to be two names of one person. However, both of these terms have separate meanings serving separate purposes. Moreover, they are covered under different sections of the Indian Income Tax Act¹. Tax rebate can be defined as the relief one can claim to decrease the income tax liability. Therefore, it is the tax liability that a taxpayer does not have to pay. Whereas a Tax refund is the amount received by an individual from the government as one’s paid taxes exceed their gross tax liability.

Who can claim a refund?

In order to claim a refund, an individual needs to meet the following criteria.

1. Your payment made should exceed (100%) your tax liability for that financial year.
2. Your TDS, or Tax Deduction at source payments, in the respective financial year, is more than your gross tax liability (after assessment).
3. If you have made any tax-saving investments at the last moment.
4. If taxes paid on the income is in a foreign country holding a Double Taxation Avoidance Agreement (DTAA) with Indian authority.
5. The higher taxes paid by you are the result of fault in assessment.

How to claim a refund?

To claim a refund on the exceeded taxes paid by you, you should

1. Start by filing a correct income tax return within the time due.
2. Check the gross advance tax payments made under Form 26AS.
3. Once you have filed the ITR, the assessment officer should find the tax calculation reasonable. If the amount of advance tax payment under Form 26AS is higher than your gross tax liability as per the ITR you filed, the tax refund might be approved by the Officer.
4. Otherwise, Form 30 can also be filed to review the income tax payments against tax liability. The income tax refunds are received faster if one provides one’s bank details for direct transfer.
5. Also, the tax refund status on your e-filing dashboard after filing and verifying the ITR.

When to file for Tax refund?

The claim for refund of exceeded tax paid can be filed within 12 months once the relevant assessment year ends. Moreover, the following conditions will apply to the refund claimed:

1. A tax refund can be claimed on paid income tax within 6 successive assessment years. The refund claimed after the prescribed time is not subject to consideration.
2. No interest is levied on the Tax refunds.
3. Delayed tax refund claims are subject to acceptance if they need verification.
4.  The gross claimed amount for 1 respective assessment year shall be less than INR 50,00,000

Taxpayer’s inability to claim Tax Refund

According to Section 238 of the Income Tax Act, 1961, if the taxpayer becomes unable to file a claim for an income tax refund for the reason of insolvency, liquidation, death, incapacity, or other cause, then in such circumstances, the legal representative, guardian, receiver, or trustee for an individual may file for a tax refund on behalf of the taxpayer.

Check your Refund status For FY 2022-23 (AY 2023-24)

One may check one’s refund status for a claim filed through any of the following modes:

1. e-filing website
2. TIN NSDL Website.

e-filing website

Follow the following steps to check your refund status on the e-filing portal.

Step 1: Visit the website using the link- www.eportal.incometax.gov.in

Step 2: Login into your account using PAN details and Passwords

Step 3: In case you don’t have an account on the portal, you may create one using the PAN and Adhaar Card details

Step 4: On the main page, click on the tab “e-file.”

Step 5: Select “income tax return”

Step 6: Choose the tab “view filed returns.”

Step 7: Here, you may check the status of your Refund Claim

TIN NSDL Website

Follow the following steps to check your refund status on the TIN NSDL website:

Step 1: Visit the website using the link- https://tin.tin.nsdl.com

Step 2: Click on the tab “services”; a dropdown menu will appear

Step 3: Select the option “Status of Tax Refund.”

Step 4: A new page will appear; on the left, select “Refund Tracking”.

Step 5: Click on “proceed” in the column of TAXPAYER REFUND (PAN)

Step 6: login into your account using PAN and Password

Step 7: Here, select the assessment year in which you want to check your status.

Step 8: On checking, one of the three possible options in the following may appear, such as:

1. Not determined: if the Officer has not determined his decision yet.
2. Refund Paid or Credited to Bank: If the refund has already been paid or has been credited to the bank for payment.
3. ITR Proceeds Determined and Sent to Refund Banker: If the refund is approved but is left to be transferred.

Step 9: If the last ITR is not visible on the dashboard, go to e-File on the menu, then select “Income Tax Returns” and select “View Filed Returns”. Here, all your ITRs are visible, along with their status. If you have been among those who file returns offline, you may navigate through ‘View Filed Forms’. In case the last ITR has already been processed and a tax refund has also been initiated, you can also see the filed ITR here.

Conclusion

Income Tax Refund is a benefit given to taxpayers in circumstances where the extra sum has been paid than the owed liability of the taxpayer. Suppose the exceeded amount is within INR 50,00,000 and has been claimed by the taxpayer within six successive years(assessment). In that case, it is highly probable that the refund claim will be validated after assessed by the Officer. Taxpayers may also check the status of file claims for refund through the e-filing portal or the TIN NSDL Website.

FAQs

1. https://www.indiacode.nic.in/handle/123456789/2435?sam_handle=123456789/1362