Income Tax Refund: How to Claim Refund & Check Income Tax Refund Status?

Paying taxes is a statutory obligation, so although painful, we do need to pay our taxes to help build the nation. However, while doing our tax calculations, we might overstate the figure resulting in us paying more than the requisite amount as tax. Under such circumstances, the excess tax amount paid to the government is refunded by the Income Tax department, and it is termed as Income Tax Refund. In this post, we will educate you on how to check income tax refund status.

Your tax liability or the amount of tax liable on you and the tax that you paid as an income tax deduction should match. However, if there is any mismatch in the same, and the amount paid is in excess, you are eligible for an income tax refund. A taxpayer finds out about an income tax refund when filing for his/her income tax returns or ITR.

When a taxpayer files an ITR and submits it to the income tax department, the officer assessing the income tax return verifies it. Once the officer finds the file to be in order, the person approves the return of your excess income tax.

The tax return received as a refund is considered a bonus income for the taxpayer since the TDS rates are much lower as compared to the income tax slab rates. Let’s discuss the income tax refund in detail.

Understand Income Tax Refund

A refund means reimbursement. An income tax refund implies reimbursement offered to a taxpayer in case the person pays a higher tax. So, in a given financial year (FY), if an individual has paid more income tax than the assessed liability on the person, it is refunded under income tax refund.

Taxpayers who are compulsorily paying advance tax or if TDS is applied to their income, are eligible for income tax refunds. A tax refund can be estimated at the time of filing an income tax return (or ITR).

Under Section 237 of the Income Tax Act, the sum paid in excess as income tax is returned to the taxpayer. However, the refund process goes through detailed verification by the income tax department before the refund is sanctioned.

The extra tax that taxpayers pay does not attract any interest unless the amount is 10% or above of the total tax paid. So, rather than paying tax in excess, it is better to avoid it and invest the money in other funds. Hence, taxpayers should make an accurate estimate in advance of the tax liable on them for the financial year and accordingly adjust the advance tax payments.

Income Tax Refund – Eligibility Criteria

A taxpayer is eligible for a refund of income tax if they meet any of the criteria mentioned below:

• If the total tax paid in advance by a taxpayer is more as compared to what is liable to the person for the particular FY
• If the TDS deducted from a person’s income for a particular FY surpass the final and assessed tax liability
• If a taxpayer makes any tax-saving investment just before the date of filing ITR
• If the taxpayer has paid tax on his/her income in another country which applies a double taxation avoidance agreement (DTAA) with India
• If due to an error in assessment, the taxpayer pays excess tax under regular assessment

Income Tax Refund claim process 

To claim an income tax refund, you simply have to file the correct return amount before the due date. Make sure to check form 26AS for the total advance tax paid while you file the return.

Once the ITR is filed, the assessment officer will check the form to his/her satisfaction per the income tax calculation. The officer would approve the refund if they find the advance tax balance paid as per Form 26AS more than the liable amount due to the taxpayer.

In case the assessment office rejects the claim, the taxpayer can file Form 30 requesting a review. The taxpayer can offer their bank account details for the refund to be directly transferred for faster transactions.

Once you file your ITR and it gets verified, you can check the status of the refund by visiting your e-filing dashboard on the income tax website.

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When to Claim Income Tax Refund?

The income tax refund can be claimed within 12 months of the applicable assessment year. But certain conditions apply here:

• Six successive assessment years is the period within which taxpayers can claim a tax refund on the income tax. Refund claims beyond that period are not accepted by CBDT or the Central Board of Direct Taxes
• No interest is paid by CBDT on the tax refund amount
• Delayed tax refund claims will be accepted only if the claim requires verification
• INR 50 lakh is the maximum claim amount that can be claimed in one assessment year

Income Tax Refund in Particular Cases

Section 238 of the Income Tax Act, 1961 gives the provision to claim an income tax refund by the guardian, trustee, or legal representative of the taxpayer if the taxpayer cannot claim the refund due to death, insolvency, liquidation, etc.

Interest to be Earned on Your Income Tax Refund

If the income tax refund amount of a taxpayer is 10% and above of the total amount paid as tax, he/she becomes eligible to receive a mandatory interest on the amount by the IT department under Section 244A of the Income Tax Act, 1961. In this case, you get a 0.5% per month of simple interest on the refund amount you receive.

Check the Status of Income Tax Refund Via the E-Filing Portal

Once you file your IRT, you can track the status of your income tax refund at https://eportal.incometax.gov.in/iec/foservices/#/login. In case you have not created an account on the website, you can do so by using your PAN and Aadhaar numbers. Once the account is created, you can check your updated ITR status by logging in to the portal.

If you need help seeing your updated ITR status on the income tax website dashboard, follow the steps below to view the online refund status.

• Visit e-File on the main menu
• Next, go to Income Tax Returns and select ‘View Filed Returns’
• And you will be able to see your ITR history and status
• For ITR returns filed via offline mode, check the ‘View Filed Forms’

Further, you can see the ITR refund status of your last ITR that has been processed in this portal.

Check the Status of Income Tax Refund Via TIN NSDL 

The status of the issued income tax refund can also be checked via the TIN NSDL portal. For this, you must go to https://tin.tin.nsdl.com/oltas/refund-status-pan.html. Next, enter your PAN number and select the assessment year of the tax refund whose status you want. You will see any of the below status messages:

• It is not yet confirmed if the refund is accepted by the officer in charge
• Refund amount is credited to your bank (in case the refund is paid)
• ITR Proceeds accepted and processed to Refund Bank (in case the cheque is drawn and the refund is still to be transferred)

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