Everything you wanted to know about income tax refund

Let us explore in detail the process of getting a refund of the claims you have made while filing your IT returns.

Sep 17, 2019 02:09 IST India Infoline News Service

Now that you have filed your tax returns, you may be eager to know all about your income tax returns. Let us explore in detail the process of getting a refund of the claims you have made while filing your IT returns.

What is a refund?
Have you ever wondered what exactly are you entitled to returns of? Well, if you have not found answers to it yet, here is the answer. Refund arises when the taxes you pay including the interest component is higher than your actual tax liability. For a salaried person or even a self employed individual it may be tax deducted at source. However, it can comprise of other elements such as self-assessment tax, advance tax or foreign tax credit.
How to claim a refund?
All you have to do to claim a refund is file the returns of your income properly for the assessment year in question. Once you have filed your returns, make sure that your returns are verified. This you can do by sending a signed physical copy of the ITR(V) to the Centralised Processing Centre (CPC) within 120 days of having filed returns.

The other way to do it is through the use of your Aadhar number with an OTP or through your bank account online. The process of e-verification is easier and faster than the physical verification. While you have a good 120 days to complete this process, do bear in mind that the earlier your verification is done, the sooner your returns are going to be processed. Once your IT returns are formally approved by the CPC, a refund is issued. This amount arrives directly to your savings bank account. The faster the verification is completed at your end, the faster the returns will be approved and you will get a refund.

How to check your refund status?
Once you have filed your returns and e-verified your returns, it is a prudent practice to check your refund status, on the refunds page of the IT department. Simply follow the step by step procedure as stated on the page. This involves stating your PAN number, the year of assessment and the captcha image at the bottom of the page. The status of your refund will be reflected on the next screen.

What if the refund is not processed?
A delay in the refund process may happen due to several reasons. They are as follows:
  • You have chosen to verify your returns through the physical route rather than e-verifying your returns.
  • There is a delay either from the end of the IT department or that of your refund banker.
  • There are discrepancies in the bank account shared with the IT department. It may be wrong or may have changed in the past and you have forgotten to update information about the same.
  • You have simply not made any explicit request for a refund while filing your returns.
  • The tax returns you have computed are incorrect according to the IT department and your refund request has been rejected.
You may simply need to rectify your returns if any of the above scenarios are applicable to you. Else, you can write to the jurisdictional CPC writer and follow it up at regular intervals.

Adjustment against an outstanding demand
There may be times when the IT department may not issue the full refund to you, because you may have outstanding dues from the previous year or in any other assessment year. However, before making an adjustment the IT department has to notify you under Section 245 of its intentions and give you a chance to respond with an explanation about why the adjustment should not be done. If you have any objections or have a good reason as to why the adjustment should not be made, you need to respond to the department within the specified time limit as mentioned in the intimation. In case it does not receive any response from your end, it will go ahead with the adjustment as specified.

IT return scams and how to stay safe from them
In this age of technology, while convenience has increased manifold, cyber crimes are multiplying by the minute as well. One such scam is the flurry of fake or fraud emails regarding your refund amount. These mails usually ask for your bank details. Unsuspecting taxpayers often fall prey to such tricks. It is to be noted that the IT department already has the details since you already provide it while filing of your returns.
Besides, the IT department will never ask you to divulge any such sensitive information over the email. Thus, as a taxpayer it is prudent to be beware of such scams. The other way is to check the status of the refund as mentioned earlier to check the authenticity of the information. Lastly, and perhaps most importantly, do not divulge bank account details over the email. 

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