Future Generali

What can I do to get income tax refund?

One can claim Income Tax Refund in the case of having paid a higher amount as tax vis-a-vis the amount actually payable. Sections 237 to 241 of the Income Tax Act prescribes rules for refund of income tax.

Filing Income Tax Return (ITR) and claiming refund:While filling the annual Income Tax Return one can seek exemption from tax by declaring individual investments like those in mutual funds, bank fixed deposits, payment made towards child’s tuition fees and so on. These can be claimed through Form 16. If one realises that a proper claim for exemption through Form 16 has not been made, and the tax paid is greater than the individual's tax liability, then a refund claim can be made. Other scenarios where an individual can end up paying more tax are:

    • TDS is higher than the total tax liability.
    • Self-assessment tax paid is higher than the income tax payable.
    • Advance tax paid is higher than the actual tax to be paid.

Process of claiming income tax refund: While earlier it was mandatory to submit Form 30 to claim an income tax refund, the Finance Act, 2019 stipulates that the income tax department will process the refund claims directly on the basis of Income Tax Return documents. The digitalisation of the process of claiming refunds has made the process convenient and easily trackable. 

From 2019, the income tax department has provided pre-filled Income Tax Return forms comprising information pertaining to details like income from salary and interest income. Once an individual fills the ITR form applicable to his tax bracket, one gets the option for validating it. After completion of the process, the amount refundable will be automatically shown in the refund row.

An individual should, however, note that the refund amount claimed will be accepted only after the income tax department has processed the ITR. After the claim for refund is validated, the department will then issue e-refunds. The income tax refund will be made to the bank account that is linked to the PAN number. To claim refunds, one must ensure to provide correct details of the bank account and get it pre-validated.

In the case of accepting an individual’s claim for refund, the income tax department provides a reference number to track the claim. The department provides the number while informing the individual about the amount of refund that is payable through email and SMS to the registered mobile number. An individual can track the refund status by providing a unique number in the income tax department’s e-filing website. The following three steps are required to track the refund claim:

1. Login to the e-filing website with the requisite details like user ID and password.

2. Click on ‘My Account’ tab, which will provide the option of refund/demand.

3. Track your status.

The State Bank of India, which has been designated by the Income Tax Department for making refunds, will usually transfer the refund amount directly in the individual’s bank account. As per the relevant rules, an individual can receive a monthly interest of 0.5% for not receiving the income tax refund within the specified period.

Disclaimer and Links