What is Income Tax Refund?

An Income Tax Refund is a refund which is issued to the taxpayer by Income Tax authorities when his tax liability is less than the actual taxes he paid.

Who is Eligible for Tax Refund?

There are several situations where a person becomes eligible for tax refund:
• If the taxpayer has paid more tax as self-assessment but he is liable to pay less tax through regular assessment.
• If TDS deducted by bank or employer of taxpayer is more than latter’s tax liability through regular assessment.
• If the same income of a taxpayer has been taxed in a foreign country (with which the government of India has an agreement to avoid double-taxation) and in India as well.
• If the taxpayer had not declared some investments which provided tax benefits to him.

How to Get Income Tax Refund in India?

Tax refund can be claimed by filing your return of income. Usually the return filing due date each year is 31st of July each year unless extended.

How Much Income Tax Will I Get back?

To find out the amount of income tax you are eligible to get back as refund, you need to calculate your actual tax liability. If the taxes paid by you are more than your tax liability then the extra taxes paid by you will be refunded by the tax department. You can use our income tax calculator to find out your tax liability and refund that you are eligible for.

How Long Does it Take to Get a Tax Refund?

The refund is processed within 2 to 6 months from the date of e-filing your return online. It takes longer if you file your returns physically.

How is Tax Refund Paid?

Tax refund is paid either through direct credit to your bank account or by cheque.

Can I Claim Tax Refund from Previous Years?

In an Assessment Year, claiming tax refund for Previous Years is possible for up to 2 Previous Years or Financial Years.

How to Check Income Tax Refund Status Online

To check your refund status, you can visit the website https://tin.tin.nsdl.com . Then, once you enter your PAN and relevant Assessment Year, you can see your refund status.

Here is a list of different refund status which you can find on TIN website of the Income Tax Department (ITD):

Your Refund Status Says that Refund had Expired:

The validity period for refunds to be presented as payment is 90 days. If this period expires, it is marked as expired and cancelled.

Steps you should take:

1.

If you paper-filed your return, then you should contact the concerned Assessing Officer.

2.

If you had e-filed your return, then follow the following procedure:

    a.

you should go to ITD’s e-filing portal at https://incometaxindiaefiling.gov.in

then login with your user id and password

c.

now go to “My Account” tab and select “Refund Re-issue Request” from the drop down menu

    d.

and fill up all the required details to raise a refund re-issue request

Your Status Says that Refund had Returned:

It means that refund sent by speed post has returned undelivered. In such a case, refund is cancelled and retained at CMP centre.

Steps you should take:

1.

If you paper-filed your return, then you should contact the concerned Assessing Officer.

2.

If you had e-filed your return, then follow the steps mentioned under

1 (b).

Your refund status says that refund was processed through direct credit mode which had failed:

This status appears if refund for credit to account maintained with SBI had failed. Some possible reasons for failure are as follows:

1.

Account had been closed.

2.

Operations in the account had been stopped/restricted/on hold.

3.

The account may be Fixed Deposit/Loan/PPF account.

4.

The account may be NRI account.

5.

The account holder may be deceased.

Steps you should take:

1.

If you paper-filed your return, you need to provide correct account number and IFSC/MICR code to the concerned Assessing Officer. Once this information is updated, Assessing Officer will reinitiate your refund.

2.

If you had e-filed your return, then follow the steps mentioned under

1 (b).

Your refund status says, paid. You have received the ECS refund advice but your account has not been credited:

This may happen due to wrong account information being used by the bank to transfer the amount or delay in credit to your account on part of the bank.

Steps you should take:

First you need to check the account number and IFSC/MICR code mentioned in the ECS advice slip carefully.

1.

If account information is correct, then you should contact your bank and enquire about the status of NEFT UTR number or NECS sequence number as displayed on TIN website.

2.

If account information is incorrect, you should contact your bank to find out if the amount has been credited to wrong account. You can send an email to intro@sbi.co.in for more guidance.

Your refund status says that refund had been adjusted against outstanding demand of previous year:

This status is displayed if your refund for the current year had been adjusted against outstanding demand of previous Assessment Year either in-part or in-full.

Steps you should take:

1.

You should verify the details mentioned on the ECS advice. If you had paper-filed your return, then you can find the details of the outstanding demand by contacting Ward Assessing Officer/CPC Bangalore.

2.

If you had e-filed your return, then:

    a.

login to your account and select “Submit Grievance” under “Helpdesk” tab

    b.

and choose the first option as shown in the image below to make enquiry about your refund status

Your refund status says that refund was processed through NECS/NEFT mode which had failed:

It means that the refund processed through NECS/NEFT mode had failed.

Steps you should take:

You should verify the account details given at the time of filing your tax return.

1.

If you paper-filed your return, then you should contact the concerned Assessing Officer for modification in account details and raise refund reissue request.

2.

If you had e-filed your return, then:

    a.

you can login to your account on ITD’s e-filing portal at https://incometaxindiaefiling.gov.in and choose “My Profile” tab under “Profile Settings”

    b.

and make the required changes in your profile

    c.

once done, you can raise a refund reissue request by following the steps mentioned under

1 (b).

If You Have Filed a Return and Refund Has Been Claimed but Not Received

In case you have filed your return and a refund is due but not received then you have to login to Income Tax website and login to ‘My Account-My returns/Form’ to know the update on the status of your return. The refund can be in process since because the return hasn’t been processed by the IT department yet or IT department has decided on a ‘no refund due’ after processing. You might not receive the refund even if your contact details like bank account number or postal address are wrong or you were not at home when the cheque was delivered to you.

What to do if My Income Tax Refund Cheque Expired?

If your refund cheque has expired then you can make Income Tax refund reissue request online from Income Tax e-filing portal.

Income Tax Helpline Number and Email ID

If you have any query or complaint regarding Income Tax Refund, then you can register your Income Tax refund complaint online through Aayakar Sampark Kendra Toll Free No. 1800-180-1961 or send an email at refunds@incometaxindia.gov.in
If you want to make any Income Tax refund enquiry regarding modification in refund record related to return processed at CPC Bangalore, you can call on toll free number 1800-425-2229 or 080-43456700.
If you have any payment related query, you should contact SBI Contact Centre Toll Free No. 1800-425-9760.
Fill your PAN, choose relevant Assessment Year and enter captcha code. Now press Submit button to see your tax refund status.

Taxability of Income Tax Refund

Refund will not be taxable in your hands as it is only the receipt of excess taxes and not income earned. Income earned is taxable and not tax refunds.
However, if you have received interest on tax then this interest portion is taxable according to slab rates applicable to you. This is included as income of the year in which the refund is received.

How Does a Tax Refund Arise?

Refund of tax arises whenever there is excess deduction of taxes from your salary. In case of a salaried individual, this can happen when he/she has failed to declare some investments made by him / her which led to excess tax deduction.

If You Have a Refund Re-issue Request

In case you have a refund re-issue request then you need to login to ‘My Account-Refund Re-issue Request’ and give the necessary details for mode of payment like ECS or cheque and changed or corrected address.
This needs to be done when the refund is returned due to error in house address, bank details or house locked when cheque is received through post.
The refund status can be checked after 2-3 weeks of the ITR being filed and refund can be received in 4-6 months.

Am I Eligible for Interest on My Tax Refund?

Yes you are eligible for an interest on the refund payable to you. Interest is calculated @0.5% per month or 6% per year from the first day of the Assessment Year until the date when the refund is paid to you. In this case even a part of a month is considered as full month for interest calculation purposes.
E.g., if you have claimed an interest of Rs. 3,000 for AY 2015-16 and you received the refund in the month of February 2016 then the interest will be calculated from April 2015 to February 2016.

However, it should be noted here that interest is payable only when the amount of refund due is more than 10% of the tax payable by tax payer.

In Order to Claim Tax Refund is it Necessary that Tax Return Should Have Been Filed within the Due Date?

No. You can claim tax refund even if you have filed a belated tax return.

What to Do if you do not Receive Your Tax Refund?

You need to contact the Central Processing Centre of the Income Tax Department on the numbers 1800 4250 0025, and 080-2650 0025. This number is provided on the government’s e-filing portal.