Income Tax Refund in India – ITR Refund

What is the Process of income tax refund in India?

The system is undoubtedly improving with each passing year. Tax refunds are no longer sent in paper cheques in the mail. Income Tax Refunds were paid faster in FY 2019-20 than in FY 2018-19, according to the government. During the current fiscal year, 65 percent of refunds were issued within 30 days of the Income Tax Return of the assessee being verified.

According to the government, just 50% of reimbursements were issued within 30 days in 2018-19. “The Government has been issuing Income Tax refunds to people swiftly,” Minister of State for Finance Anurag Thakur told the Lok Sabha earlier this year. 

The average period for refunds to be released for FY 2019-20 until 31.01.2020 is 59 days from the date of the taxpayer’s ITR verification. Furthermore, 65 percent of reimbursements were issued within 30 days in FY 2019-20, compared to 50 percent in FY 2018-19.

 

 

How long does it take to collect an income tax refund if you file an ITR online?

Your income tax return must be processed by the tax department within one year of the end of the financial year in which it was filed, according to current tax laws. According to current legislation, if an individual file an ITR for FY 2019-20 by July 31, 2020, the income tax department has until March 31, 2022 to complete and issue the intimation letter to the taxpayer. 

However, the tax department will now be obligated to complete such ITRs by December 31, 2021, as per the budget plans. If the tax department accepts your income and tax calculations on a prima facie basis, you will receive a notice under section 143(1). The following information is included in this notice:

A) Your income information, claimed deductions, and tax computations match the assessments and calculations of the tax department: In this instance, both the tax payable and the tax refundable will be zero on the notification.

B) Additional tax demand notice: When the tax department determines that you have not added a particular income to your ITR, have incorrectly claimed a deduction, or have calculated your tax incorrectly, resulting in additional tax payable or incorrect credit of taxes paid or withheld, you will receive an additional tax demand notice. This would appear at the bottom of the notice as a tax demand.

C) Income tax refund: A tax refund is entitled to you if you have paid more taxes than your real tax liability, according to the income tax department’s assessment.

These adjustments took effect on April 1, 2021, according to the budget’s explanatory note.

Why is my tax refund being held up?

There can be some major reasons why tax refunds may take time to get processed. For example refunds were delayed in FY 19-20 owing to software upgrades that were to allow for speedier processing. 

The government claims that there are four key reasons for refund payments being delayed in some cases:

1. Taxpayer – filed returns that are incomplete or incorrect
2. Delay caused by the taxpayer‘s erroneous bank account information
3. Cases under investigation

Since March 2019, the Income Tax Department has been crediting all refunds straight to assessees’ bank accounts through an automated clearing facility. Previously, refunds were issued in the form of physical checks that were mailed to taxpayers.

What are the various refund possibilities?

One of the following refund statuses is possible:

• For this assessment year, no e-filing has been completed.
• It is unknown.
• There was no demand for a return, hence there was no refund.
• ITR calculated the reimbursement and transmitted it to Refund. Unpaid Banker Refund
• Contact the Jurisdictional Assessing Officer if you have a demand.

What should you do if your tax refund is delayed?

It is strongly advised that you file your income tax returns as soon as possible. This is because the sooner you file your returns, the sooner you will receive your refund, if there is one. As time goes on, the income tax department will be inundated with additional returns to handle. This is how your refund could be pushed back. 

However, there could be other reasons why you haven’t received your refund yet. Continue reading to learn more about the causes for this and the steps you must take.

Steps to follow if you have not yet received your refund?

1st step: 

Log in with your user ID, password, and date of birth/incorporation to the income tax e-filing platform.

Step 2: 

Select the ‘Income Tax Returns’ option from the drop down menu under the ‘View e-filed Returns/Forms’ tab and submit.

Step 3: 

Select the appropriate acknowledgment number for the assessment year for which you want to check your reimbursement. For example, if you wish to check the refund for the fiscal year 2016-17, go to the assessment year 2017-18 and click on the acknowledgment number. 

Step 4: 

In a new window, the status of your returns will be presented, together with information such as the assessment year, manner of payment, and, if applicable, the reason for refund failure.

To verify the status of an income tax refund, the taxpayer can go to the tin-nsdl website (https://tin.tin.nsdl.com/oltas/refundstatuslogin.html). After entering the PAN, relevant assessment year, and captcha code in the above link, the refund status will be displayed. Know the process of IT tax refund in India.