How to claim Income Tax Refund?

Income Tax Refund arises when taxes paid amount is more than your actual tax liability (including interest). It could be in the form of advance tax, tax deducted at source, foreign tax credit etc.

1. Process for claiming income tax refund

In order to claim an income tax refund due to assessee, can claim tax refund by filing the return of income. It is mandatory to vertify the return electronically through aadhar number otp, EVC generated through bank account or physically verification by courier the signed ITR acknowledgement to Centralised Processing Centre (CPC) within the time limit of 120 days of filing the return.

Taxpayer has a time limit of 120 days from the date of filing of return to verify his return. The earlier verification done, the earlier CPC will process your return. Once the return has been processed by CPC at primary level for arithmetical errors etc, refund will be issued to the taxpayer. If verification of IT return itself is delayed, processing of return and issue of refund also will be delayed.

2. Refund is not processed at CPC: What to do?

It is possible that your IT return may not have been completely processed by department for some reason and no refund is issued. Please mark that taxpayer’s records, are transferred to jurisdictional assessing officer (for every Assessment Year) by CPC after a particular time period. An intimation will be sent by department to the taxpayer informing the same. Once files are transferred to assessing officer, taxpayer can follow up for refund by submitting a letter in this regard to the jurisdictional AO (Assessing Officer) and follow up personally at regular intervals.

3. Rate of Interest on income tax refund

As per Section 244A, interest on income tax refund and provides for interest at the rate of 0.5% per month or part of the month on refund amount. Such interest amount shall be calculated from April 1st of assessment year till the date of grant of refund if refund is due to excess payment of advance tax paid or TDS. In case of any difference in the interest computation, you may raise an online request for rectification of the same.

4. How you can check refund status?

You can check your refund status online by using the below given process:

• To access the refund pages (eg. OLTAS payment and refund status)
• Enter PAN, relevant assessment year and captcha image and click on the ‘submit’ button
• You will see the Refund Status displayed after submission of request
• You can also check the Refund amount details reflected in Form 26AS

5. Adjustment of refund against outstanding demand

Under Section 245, If at all you have taxes due for any of the previous years and a refund due to you in another year, the department may adjust the refund accordingly. However, the department cannot adjust the refund amount without giving the taxpayer an opportunity to explain why such an adjustment should not be done. Therefore, the tax department must send you an intimation under Section 245 with instructions on possible ways for you to respond to the notice. The time limit as per Section 245 is 30 days. In case of no response received from taxpayer within the prescribed time limit, the department can go ahead with the adjustment as per notice.

6. Beware of scam emails

Taxpayers can receive plenty of scam emails regarding income tax refund along with requests to share their personal details like bank account details, OTP etc. over an email for processing the refund. Department has already these details, as provided by you in your returns. So, be aware of these kind of scam emails.

Lalita Sharma

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