How to check your Income Tax Refund Status ?
What is Income Tax Refund?
When individuals file their income tax obligations through Tax Deducted at Source (TDS), advance tax payments or self-assessment tax, they remit more tax than their actual liability. Such a situation occurs due to claiming excessive deductions or benefiting from exemptions or credits. Here comes the role of “Income Tax Refund.” It refers to the repayment of a taxpayer's excess income tax to the government.
During income tax return filing, the tax is calculated according to the taxpayer’s income, deductions, and other factors. After the scrutiny of tax authorities to assess the actual tax liability, if the determined tax liability is less than the amount already paid, the excess tax is refunded to the taxpayer.
Here’s a simplified explanation of how it works.
Total tax paid in a financial year - Total tax payable = Refund
When Are You Eligible To Claim An Income Tax Refund?
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Excess TDS Deducted
Employers deduct taxes according to the documents, such as proofs for investments like 80C or medical insurance premiums. In any case, if the employee can't furnish proof by the financial year's end, the employer might deduct higher taxes.
Further, according to their eligibility, the employee can claim the benefits later by filing the IT return, such as ITR-1, ITR-2, etc, and seek a refund of the excess taxes paid.
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Income Below Taxable Bracket
Individuals with income less than the taxable threshold (e.g., less than Rs 5 lakh) may not be required to pay taxes. Yet, their taxes got deducted. So they can seek a refund on the excess tax deducted.
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Excess Advance Tax Paid
If the advance tax paid on self-assessment exceeds the actual tax liability for the financial year, taxpayers can claim a refund while filing their Income Tax Return (ITR).
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Doubly Taxed Income (DTAA)
Entities earning taxable income in more than one country due to being a citizen of one country and receiving income from another may claim a tax refund. Double Taxation Avoidance Agreements (DTAA) allow non-residents to claim a refund if their income is taxable in multiple countries.
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Excess TDS on Interest Income
Banks may deduct TDS on interest accrued from FDs or bonds if it exceeds the specified limit in the Income Tax Act. Taxpayers can claim a refund if excess TDS is deducted.
All the instances mentioned above are subjective, so seeking advice from a professional tax expert from Karr Tax is suggested to ensure compliance with tax laws and guidelines to facilitate a smooth refund process.
How To Claim An Income Tax Refund?
To initiate the process of claiming an income tax refund, the taxpayer needs to file their Income Tax Return (ITR). The department will consider the ITR for refund processing only if it is verified through online modes or by sending a signed copy of ITR-V through offline means.
Have you filed your Income tax return to claim a refund? If not, get started with Karr Tax's user-friendly platform.
Want to save on taxes? Get it touch with our tax professionals to know the strategies!
How To Check IT Refund Status?
Once the refund is processed, you can check the refund status in the following ways.
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The Income Tax E-filing Portal
Follow the below steps sequentially.
Step 1.) Visit the official Income Tax portal website and log in to the account using your PAN and password.
Step 2.) Go to the “e-File” section, select "Income Tax Returns’ and choose the ‘View Filed Returns’ option.
Step 3.) Here, you can check the refund status of your current and previously filed returns simultaneously.
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The TIN NSDL Portal
Here are the steps to check IT refund status via the TIN NSDL Portal.
Step 1.) Visit the official TIN NSDL Portal, and you will see a page shown in the image
Step 2.) Enter your PAN number, assessment year, and fill in the captcha. Then, click “Proceed.” Once done, you will get all the details of your TDS refund status.
Here is a list of some common terminologies for various income tax refund statuses.
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Refund Paid: Your income tax refund has been successfully transferred to your bank account.
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No Demand, No Refund: This status indicates that the tax amount deducted is accurate and the income tax department does not owe you any refund.
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Demand Determined: Your demand for a refund has been rejected, and the department's calculation suggests that you need to pay additional tax.
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ITR Proceeds Determined and Sent to Refund Banker: It implies that your income tax refund has been processed, and the amount has been sent to the refund banker for further processing.
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Refund Failure: The IT department has issued the refund, but it was not processed due to bank detail errors.
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Rectification Proceeded On, No Demand, No Refund: The income tax department has proceeded with rectifying your return, and there is neither a demand for additional payment nor a refund owed.
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Rectification Proceeded, Demand Determined: The rectified income tax refund request has been accepted, but the demand for additional tax payment has been determined. This amount needs to be paid within 30 days of the notice.
Frequently Asked Questions (FAQs)
1.If my refund status displays “Refund Failure,” can I apply for that again?
You can raise a “Refund Reissue” request under the ‘Services’ tab and add the bank account number where you want the credited refund. It will only be processed if the bank account is pre-validated.
2.I have changed my bank account number and want to change this in IT return. How to do this?
If you need to update your bank account number in your income tax return, it is typically applicable in cases of refund failure. Where your IT Return has been processed, a refund was generated, but you have yet to receive it.
To change the bank account number under such circumstances, follow these steps:
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Log in to the official income tax website. Navigate to 'Services' and select 'Refund Reissue.'
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Create a refund reissue request, specifying the updated bank account details where you want the refund to be credited.
Ensure the new bank account is pre-validated, as the refund will only be credited to pre-validated accounts. Submit the refund reissue request.
3.How to check my income tax refund status online?
You can check your IT return refund status online in two ways.
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By the Income Tax E-filing Portal
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By the TIN NSDL Portal
4.Is IT refund taxable?
No, income tax refunds are not taxable as they are the return of excess income tax a taxpayer has paid to the government throughout the year. Since the refund is essentially the return of your own money that you overpaid in taxes, it is not treated as new income. Therefore, it is not subject to additional taxation.
5.Some of my personal details have changed. How can I update the address, email ID, and mobile number I provided in my Income Tax Return?
To update your contact information, log in to the income tax e-filing website and navigate to 'My Profile.' Click 'Edit Contact' and enter your new address, email ID, or mobile number. Once you submit the changes, your updated contact details will be reflected in your profile and automatically sent to the Central Processing Center (CPC) for updating in your income tax return.
6.What is the meaning of the term “Restricted Refund”?
Restricted refund refers to the error that arises due to the inconsistency between your PAN and bank account number.
7.Is there any compensation for a delayed income tax refund?
In the case of a delayed income tax refund, you are entitled to receive compensation. You will be eligible for an interest payment of 0.5% per month or part of the month on the amount that was due to you. This interest accrues from the 1st of April of the assessment year and continues until the date when your refund is granted.
8.What could be the reasons for delayed income tax refunds?
There can be several reasons behind this situation.
Processing Status
Your Income Tax Return might still need to be processed. Inspect the status by logging into the income tax e-filing website.
No Refund Determined
Your income tax return might have been processed, but the Income Tax Department has determined that no refund is applicable in your case.
Refund Not Credited
Your income tax return could have been processed with a refund, but it has yet to be credited to your account. Ensure that you have pre-validated your bank account.