Income Tax Refund: Step By Step Process

Income Tax Refund

We all must have heard about Income Tax Refund. Or you didn’t? It’s okay if you didn’t hear about an income tax refund. We’re just going to talk about it. If we talk about any tax refund, that means it is a refund to the taxpayer of any excess amount which has been paid to any government. So, efficiently, the income tax refund is the recompense of any additional amount excluding actual tax amount which will be paid by the government to the taxpayer.

Income tax refund process eligibility criteria work in that case when the taxpayers paid higher taxes than the actual tax amount or liabilities. Then, It should be kept in the form of advance tax so that the taxpayers can adjust the previous year advance amount in the next year ITR’s amount. Let us talk about the refund process step by step.

Contexts that have been discussed in this content regarding the income tax refund:

  1. Procedure to ensure pay charge refund.
  2. Early planning of return prompts early refund receipt
  3. What to do if the refund isn’t set up at CPC?
  4. Get interest amount on income tax refund!
  5. Examining the refund status.
  6. Modification of refund against the extraordinary request

Income Tax Refund.


Procedure to ensure pay charge refund.

Firstly we have to know about the procedure of the income tax refund. As there is no such procedure to claim the tax refund. It is the same way as filing the return of income you can do it anyway. Assurance your return is electronically checked through aadhar number OTP, EVC made through money related equalization or genuinely affirmed by posting the stamped ITR-V (attestation) to Centralized Processing Center (CPC) inside 120 days of recording the return. The tax refund can be claimed through cheque or by your registered bank account. If you are getting the claim via cheque you have a convenience of tracking it through the speed post service that has going to deliver you. You just need the reference number given by the IT department. If you are payable through the bank account you can track the refund via NSDL-TIN website by clicking on ‘Status of tax refunds’. You will need the PAN number and the assessment year for the refund details.

Early planning of return prompts early refund receipt.

By this means if you pay your income tax return early than you will get the compensate of refund early. If we talk about the time limit, the taxpayer has initially 120 days from the filing date to confirm his refund. The prior you complete the confirmation, the previous CPC will deal with your return. The refund will be issued to the taxpayer when the CPC will check the figure errors, etc. You should file the tax return early as you can either your refund will also get delayed. Thanks to income tax e-filling which nowadays saves a lot of time.

What to do if the refund isn’t set up at CPC?

Most of the times it happens that your return is not completed by the end of the CPC due to some cause and you don’t get any refund. In this case, you have a benefit that all the taxpayer’s records, for each assessment year are sent to the jurisdiction office by CPC after a specific time. A message will also be sent for the same. So, that the taxpayer can personally take follow up regarding his/her refund by submitting the letter to jurisdiction office and then they can take follow-ups at regular intervals.

Get interest amount on income tax refund!

Sometimes, when the procedure has done by IT refund claim the taxpayers did not receive their refund on due time. If this happened to you, you don’t need to worry. You will get 0.5% of interest on the expected refund amount for every month delayed. The interest rate is always calculated from the financial year. If the delay is from your end, the IT department is not responsible and you will not receive any interest the rate for the same. In some cases, you may have noticed that you have received some higher amount of refund to what you actually should be claiming. The interest is paid by the tax department in case the refund is 10% or the tax has been paid in excess amount.

Examining the Income Tax Refund status

You can examine the refund status by following the below procedure:

  • Firstly, you have to login through your income tax e-filing website.
  • Then you have fill all the details such as User ID, password, date of birth, and captcha.
  • Click on ‘Submit’.
  • Now, go to my accounts tab and then click on the Refund/Demand status.
  • Finally, all the detail will be displayed on the screen of the current Assessment year.

Modification of refund against the extraordinary request 

There can be a scenario when the department will not be able to pay the refund amount. In this case, it means that maybe you have some previous year return to be paid so your current year refund will be adjusted by the income tax department. But, this cannot be done by not even telling you. The department will ask you if they can do so and give you the chance to describe that if the adjustment can be done or not. They will send you an intimation under section 245 explaining the adjustment procedure along with all the instructions so that you can respond to the notice positively. Section 245 gives 30 days intimation to give a response to the procedure. If no response received by the department within the given time period, the department is free to adjust the refund according to the notice.

And, if you disagree to the adjustment because of reasons like some errors or omissions, you can respond to them within 30 days by following the instructions which have been provided by them.

WARNING! Scam email alerts for Income Tax Refund

The taxpayers can get hundreds of scam emails regarding income tax refunds and how you can claim a refund on your income tax. They will ask for your personal details like your bank details, PAN card details, etc. But you should be fully aware that why will the income tax department will ask for your bank details when they already have it because you pay returns. So, be careful about such incidents.

Lastly, you should always be updated about the status of the income tax filing and verification of the ITR. You give a good and working bank account so that you can get your refund easily and hassle-free. Refund is a good surprise for the taxpayers as they never expect it and they get some extra cash which they can save or use for some chill-out sessions.