Individuals may occasionally find themselves in a position where they’ve overpaid income taxes. This could be due to various reasons, such as having taxes deducted at the source or errors in income tax calculations. When faced with these circumstances, the option of claiming an income tax refund becomes not only relevant but crucial. However, before proceeding with the claim, it’s important to understand what is income tax refund and to be familiar with the specific conditions that make one eligible for a refund.
In this article, we will delve into the concept of income tax refund, encompassing its intricacies, the process of claiming it, and the different methods for checking the status of your refund requests.
What is Income Tax Refund?
Income tax refund is a reimbursement provided to a taxpayer who has paid more taxes during a financial year than their final assessed liability. This situation arises when the taxpayer has made mandatory advance tax payments or has encountered tax deductions on their earnings. The excess tax amount is repaid to the taxpayer as a refund under Section 237 of the Income Tax Act, 1961, after thorough verification of the filed income tax return by the tax authorities.
Eligibility Criteria for Income Tax Refund
Understanding the eligibility criteria for an income tax refund is crucial in navigating this process. Here are the key conditions that determine your eligibility:
- If you’ve made advance tax payments based on your own assessment, and this payment surpasses the actual tax liability determined through regular assessment.
- When the Tax Deducted at Source (TDS) deducted from sources like interest on securities, debentures, dividends, or salary, exceeds the tax amount payable as per regular assessment.
- If your income is subject to taxation both in a foreign country with which India has a double taxation avoidance agreement and in India.
- When the tax amount initially assessed is corrected due to an error in the assessment process, resulting in a reduced tax liability.
- If your tax payable amount turns out to be negative after considering the taxes you’ve already paid and the allowable deductions.
- In case you possess investments that offer tax benefits and deductions, which you have yet to declare in your tax filing.
Read More About Doucments Required for ITR Filing
How to Claim Income Tax Refund?
Here are the essential steps you need to follow in order to successfully claim your income tax refund and ensure that any excess taxes you’ve paid are promptly returned to you.
File Your Accurate Income Tax Return
To get your income tax refund, file an accurate return before the deadline. Note your total advance tax payments on Form 26AS when you finalise your return.
Read More About e-Filing Income Tax Returns
Assessment Officer Review
After submitting your return, an assessment officer verifies its accuracy, particularly by comparing advance tax payments in Form 26AS with your declared tax liability in the filed Income Tax Return (ITR). If these payments exceed your tax liability, a refund approval is likely.
Filing Form 30 for Review
Fill out Form 30 to seek a review if your advance tax payment is less than your ITR tax obligation. This step examines your income tax payments and liabilities to identify irregularities.
Bank Account Details for Direct Transfer
For a faster and more direct route to receiving your TDS refund, consider sharing your bank account details. This simple addition ensures that your refund finds its way to your account with efficiency and security.
Tracking Refund Status
Once you’ve successfully filed your income tax return and completed the verification process, log into your e-filing dashboard to access real-time updates on your refund status.
Due Date to Claim Income Tax Refund
When it comes to securing your income tax refund, timing is of the essence. To make the process crystal clear, here’s a breakdown of the due date and its conditions:
Picture a 12-month window that opens right after the assessment year concludes. This period is your opportunity to claim your TDS refund.
You can go back in time to claim refunds for up to six consecutive assessment years. Claims beyond this won’t be considered by the Central Board of Direct Taxes (CBDT).
Don’t expect interest to tag along with your refund. CBDT doesn’t provide interest on refunded amounts. This underlines how important it is to take action at the appropriate time.
If you miss the initial window, all is not lost. CBDT might accept delayed claims, but they’ll undergo careful scrutiny.
For efficient management, your claim shouldn’t exceed ₹50 lakh for a single assessment year.
How to Check the Status of Income Tax Refund?
Now that you know what is a tax refund and the eligibility criteria, here are the steps to efficiently check your income tax refund status:
1. Visit the e-Filing Portal
Start by accessing the e-Filing portal at eportal.incometax.gov.in. If you’re new to the platform, creating an account using your PAN and Aadhaar numbers is your first step.
2. Log In and Discover Your ITR Status
After successful login, explore the dashboard where you can swiftly find the latest status of your ITR. If you don’t see your recent ITR right away, there’s a solution for that.
3. Dive into Historical ITRs
Navigate to the ‘e-File’ section in the menu, then choose ‘Income Tax Returns’. Click on ‘View Filed Returns’, and you will be presented with a comprehensive list of your historical ITRs along with their respective statuses.
4. Offline Filing? No Problem!
Even if you’ve been filing your returns offline, the process remains accommodating. Simply head to ‘View Filed Forms’, and there you’ll find your historical ITRs without hassle.
5. Confirm the Refund Status
Once your last ITR undergoes successful processing and a tax refund is issued, this portal serves as your trustworthy companion to verify your refund’s progress. This step keeps you in the loop, empowering you with real-time insights into the status of your refund request.
Claiming and tracking your income tax refund is an essential aspect of managing your financial affairs. Equipped with a clear understanding of TDS refund, eligibility criteria, due dates, and the process to check refund status, you can ensure that any excess taxes you’ve paid find their way back to you.
While you steer your financial journey, don’t forget to widen your financial spectrum by opening a demat account with Angel One.
How do I claim my income tax refund?
To claim your income tax refund, file an accurate Income Tax Return (ITR) before the due date. Ensure your advance tax payments match the total tax liability. If the advance tax exceeds, the refund may be approved.
How can I check my income tax refund status?
Use the e-Filing portal at eportal.incometax.gov.in. Log in, and check the dashboard for the latest ITR status. If missing, visit ‘e-File’, choose ‘Income Tax Returns’, and ‘View Filed Returns’.
What's the timeframe to claim a tax refund?
You can claim a refund within 12 months after the relevant assessment year. However, refunds can be claimed for income tax paid within the last six consecutive assessment years.
Is there interest on tax refunds?
CBDT doesn’t provide interest on refunded amounts. Prompt claim submission ensures quicker refunds.