In case you have paid taxes in excess of your tax liability for FY 2018-19, you can claim your income tax refund by filing your income tax return for AY 2019-20.
In case you have paid taxes in excess of your tax liability for FY 2018-19, you can claim your income tax refund by filing your income tax return (ITR). This situation arises when an extra tax is paid to the government through advance tax, self-calculated tax or tax deducted at source.
Suppose, you have sold a house property and the buyer has deducted 1% of the sale value and deposited the TDS to the government with respect to your PAN. However, you invested the sale proceeds in the new house property, which exempted your capital gains from being taxed. Now while filing your income tax returns, the TDS will be in excess since your capital gains are exempted and therefore your TDS shall be refunded.
Similarly, if you are earning interest on fixed deposit, the bank will have to deduct tax at source at the rate of 10% from that interest income. However, if your total income for a financial year is below Rs 2.5 lakh, i.e. basic exemption limit, the tax deducted by the bank will be treated as an extra tax paid and will be refunded to you after you claim it in your ITR.
In case of a salaried individual, it may happen that he missed submitting his tax-saving investment proofs to the employer. As a result, the employer deducted his tax without considering the tax-saving investments made. He can claim those investments while filing his ITR and claim a refund of tax deducted in excess of his actual tax liability, calculated after considering all the tax-saving avenues applicable to him.
Income tax refunds will be issued to the taxpayer only after the ITR is processed by the Income Tax Department. For the department to start the processing, it is necessary for the taxpayer to e-verify his tax returns within 120 days of filing his tax returns. Without verifying your tax returns, you will not receive your income tax refund.
Once you have filed your tax returns, the Income Tax Department processes your ITR and intimates you the refund or tax dues if any. It sends a communication after the return is processed via SMS or an email to you. The communication is sent to you under section 143(1) of the Income Tax Act. In case if you claimed a refund and department agrees to it, the intimation under section 143(1) will have the amount of refund that will be credited to your bank account along with a refund sequence number.
You can also track the status of your income tax refunds, in case the intimation is not received from the department or you have missed the email or SMS. Here are two ways to track your tax refund:
Through the income tax e-filing website
You can check the status of your income tax refund by following these steps:
Step 1: Visit the income tax e-filing website.
Step 2: Click on the ‘Portal login’ appearing on the right-hand side of the page.
Step 3: Log in to your account through your PAN, e-filing password and enter the captcha code.
Step 4: Click on ‘View returns/forms’ appearing on the screen as shown below:
Step 5: Select ‘Income Tax Returns’ from the drop-down menu and click on the ‘Submit’ button.
Step 6: Click on the hyperlinked acknowledgement number and the below screen appears.
The screen shows the timeline for filing and processing of tax returns such as the date of filing, date of verifying the return, date of completion of processing, date of issue of refund, mode of payment and so on.
Step 7: In case your income tax refund fails, the same screen will show the reason for such failure along with a link to submit refund reissue request.
Through the TIN NSDL website
You will have to follow the same steps until the 6th step to check the status of your tax refund. Once the pop-up appears on the screen, you can click on ‘TIN-NSDL website’ button.
The link will redirect you to the TIN-NSDL refund tracking page. You have to enter your PAN, select the relevant assessment year and enter the captcha code to know your refund status.
You will be able to see the mode of payment, reference number, status of your refund and date of the refund issued, once you click on ‘Proceed’ on the aforementioned screen.
Refunds are processed by the department’s refund banker, State Bank of India (SBI). Prior to FY 2018-19, the refund amount was sent directly to the taxpayer’s bank account via RTGS/NEFT or a cheque or demand draft was sent to his registered address.
However, from FY 2018-19 onwards, the department will only issue e-refunds to the bank accounts where PAN is linked and is pre-validated on the e-filing website.
The messaging displayed under the refund status can be of different types and conveys as below:
1. Refund Returned: This happens when the refund was issued by the department via ECS (Electronic clearing system) but the bank details were incorrect.
2. Processed through direct credit but failed: It means the refund banker i.e. SBI has directly credited the amount of refund to the bank account but it failed due to any of the reasons mentioned below:
# Bank account details are incorrect or account is closed.
# Account holder may be deceased
# Bank account stands inoperational
# It is a non-resident Indian (NRI) account
3. Refund processed through NEFT/NECS but failed: This happens when the amount of refund processed through NEFT/NECS fails. You should verify the bank account number, bank name and IFSC code given at the time of filing tax returns.
4. ECS refund advice received but not reflecting in your bank account: It may so happen that you have received an email from SBI with the details of the refund credited to your bank account. If the same amount is not reflected in your bank account, you can check with your bank whether the amount has been credited to the wrong account. You can also send an email to firstname.lastname@example.org for further query.
In case your bank details entered in your ITR, which is already filed and processed, are incorrect, then you will have to raise a refund re-issue request. You can follow these steps to submit a refund reissue request:
1. Logon to the www.incometaxindiaefiling.gov.in.
2. Go to ‘My Account’ tab and click on the ‘Service Request’.
3. Select the ‘Request Type’ as ‘New Request’ and the ‘Request Category’ as ‘Refund Reissue’. Then, click on ‘Submit’.
4. Details such as PAN, Return Type, Assessment Year, Acknowledgement No, Communication Reference Number, Reason for Refund Failure and response column will be displayed.
5. Click on ‘Submit’ under the response column.
6. Select the bank account to which the refund is to be credited and click ‘Continue’.
7. Cross verify the details such as Bank Account Number, IFSC, Bank Name and Account Type, as displayed on the screen. Do note that your bank account should be pre-validated with the income tax department.
8. Click ‘Ok’ on the pop-up, if the details appearing are correct. Then, e-verify the same using an electronic verification code (EVC), aadhaar OTP or digital signature certificate (DSC) to submit the request.
9. A success message will be displayed on the screen confirming the Refund Re-issue request submission.
To avoid all these communications and delay in your refund processing, make sure that you have filled correct bank details while filing your income tax returns as the refund will be processed to that account only.
(The author is Founder & CEO, ClearTax)