By Chetan Chandak
Sometimes an individual ends up paying more tax to the government than his/her actual tax liability. In such a scenario the individual becomes eligible for a tax refund. The government allows individuals to claim income tax refund while filing income tax return. An individual should make a point to understand the whole process in order to claim his/her tax refund from the tax authorities.
Having said so, there are several situations where a person becomes eligible for the same:
# If the taxpayer has paid more tax as self-assessment, but he is liable to pay less tax through regular assessment.
# If TDS (Tax Deducted at Source) deducted by bank or employer of the taxpayer is more than latter’s tax liability through regular assessment.
# Though taxes have been deducted at source on some of the income, it may be exempt or taxable at a lower rate under DTAA –Double Taxation Avoidance Agreement.
# If the taxpayer had not declared some investments or expenses to his employer which provides tax benefits to him.
You can claim tax refund while filing your return of income. The due date for which is approaching on 31st of July, 2017. Once you are done with your refund claim, you can see it in the Income Tax Return filed by you. After filling up the relevant ITR form, click on the calculate tax button. The system will automatically calculate the refund due to you or taxes payable by you on the basis of the data provided by you. If you are eligible for a refund, your refund amount will reflect in the ‘Refund’ row. In the next step, you have to e-file your tax return and verify it.
After you are done with filing and verification of your ITR, the IT department will process the return and verify your claims. Following this, an intimation under Section 143(1) will be sent to you basis the outcome of the processing. Possible intimation can be any one of the following:
# Your tax calculation matches that of the tax department. Hence no further tax is payable by you.
# Your tax calculation does not match that of the tax department. Hence you are liable to pay additional tax i.e. tax demand. Or, your refund claim is either rejected or accepted partially.
# Your tax calculation matches that of the tax department, and they have accepted the refund claim, in such a case the amount of refund payable is stated in the intimation.
For online returns, the intimation is sent through email. Also, an SMS is sent on the registered mobile number of the assessee stating that his/her ITR has been processed.
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You can track your refund status by logging to the income tax e-filing website and clicking on the Refund/Demand Status under the ‘My Account’ tab. Also, 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. The tax refund will be paid either through direct credit to your bank account or by cheque.
It is equally important that you exercise the following precautions while filing ITR:
# You should ensure that you enter the correct bank details, such as IFSC code, bank account number, MICR code, etc.
# Take care not to commit any error while quoting your Permanent Account Number (PAN).
# Communication address should be correct because all the notices and other communication from the tax authorities will be posted to this address. Even a slight mistake on your behalf may lead to delay in credit of tax refund or omission of the refund altogether.
# Do ensure that you mention the correct TAN (Tax Deduction and Collection Account Number) of the employer or other deductors and TDS amount deducted by them in your income tax return.
# Details as mentioned in Form 16 should match with your Tax Credit Statement (Form 26AS).
# Mention all the deductions claimed on your investment under Section 80C and others so that you receive the right amount of refund in your account.
It is advisable if you file your return early. For the simple reason, that early filing will lead to early refund process. Another advantage of early filing of return is that you will not miss out on the interest on the refund amount.
(The author is Head of Tax Research, H&R Block India)