Income Tax Refund is initiated when you pay a higher tax amount to the IT Department than your actual tax liability. In layman’s terms, this happens when the self-assessed tax paid/advance tax/TDS deducted is more than the total tax you have to pay to the government. The considerations for the same are as per the conditions under the Sections 237 to 245 of Income Tax (IT) Act, 1961. The refund you claim will show in the ITR you file. You can claim IT Refund easily online, and we will discuss its procedure in detail in the post below.
Apart from the process to claim Income Tax Refund, we will also discuss about things to expect after processing of the ITR, role of SBI in payment of IT Refund, interest paid to you on the refund claim amount and relevant things to consider, conditions under which interest is not paid, interest you have to pay back on excess refund, interest not paid due to incorrect details, and frequently asked questions.
After filing ITR for a particular Financial Year, you can claim refund for excess tax deducted or paid in that FY. According to the Income Tax Act, 1961, you need to file ITR online by July 31 every year until the deadline is extended by the IT Department. The Financial Year succeeding a FY is known as relevant AY (Assessment Year) for that Financial Year.
NOTE: Make sure to pre-validate the bank account where you wish to get the refund amount. The Income Tax Department will provide e-refunds to only the bank accounts that are linked to PAN, and pre-validated on its official web portal.
After the I-T Department processes the IT Return, you will receive an intimation about the same as per the outcome of the verification. If you have e-filed returns, then you will receive the intimation on your registered email address. A similar intimation is also sent on your registered mobile number.
If the department requires additional details, then your case will be scrutinized. After this a notice under applicable section will be sent to you.
The intimation as per the Section 143(1) is sent to you and may show the following results:
The Income Tax Department has authorized State Bank of India (SBI) for payments of IT refunds. This can be initiated through direct credit in your account or cheque. You need to provide accurate bank details in the ITR Form to receive the online IT refund payment by the Department. The ITR form has a row to enter the details of bank account where you wish to get the refund. If the refund claim is accepted, then the due amount will be credited directly to your provided bank account in time.
Under Section 244A, if a refund is due to you, then the I-T Department will pay an interest on this amount with subject to certain terms and conditions, such as:
Here are the things to consider:
But there is no interest payable if the refund amount is lower than 10% of your tax liability. If the refund payment is delayed from the deductor, then the time period considered will be excluded from the total period on which the payable interest is calculated.
As per the norms of Section 234D of the Act, if you receive a refund amount higher than what you are eligible for, then the Department will recover the excess amount as well as the excess interest it pays.
After filing and verifying ITR, keep a regular check on the status of income tax refund online. If you filed ITR with a claim for refund, but not received the same, then it could be due to following reasons:
Here are the FAQs on Income Tax Refund Online:
There are certain cases when one is eligible and can go for IT refund. A few of these are stated below:
You can avail refund by filing the return of Income Tax online. Generally, the date of filing IT return is 31st July unless it is extended.
To know the amount of tax you will get refunded, calculation of tax payable associated with the payer needs to be calculated first. If you have paid a higher amount than what it should have been submitted, then the difference amount will be refunded by the department.
The payment is directly transferred to the pre-validated bank account of the claimant or sent in the form of cheque.
You can check the status for IT fund online on the NSDL website or the portal for e-filing of income tax. If you are doing the same on the e-filing portal, then login to your account. Click ‘View Returns/Forms’. Against ‘Select an Option’, click ‘Income Tax Returns’, and pick the relevant Assessment Year. Then click ‘Submit’. Click the Acknowledgement Number and view the status of the income tax refund online.
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