In case you pay more tax than you are liable to pay, you can claim the extra paid amount as income tax refund. If the tax paid, either in the way of Tax Deducted at Source, Advanced tax, Tax Collected at Source, or Self-Assessment Tax, is more than the tax that is due, you can claim the additional tax paid as a refund. You can also receive a refund in case you qualify for certain credits or deductions.
But before initiating the refund claim, the IT department will recompute your taxes and validate your refund claim.
Procedure of income tax refund has been made easier by the government by making it completely online. After you file your income tax return and verify the same, you will receive your income tax refund, usually within a period of 20 to 45 days after your ITR is processed.
Keep reading to find out how to check your income tax refund status and the meaning of each status.
Who is eligible for income tax refund?
You become eligible to receive an income tax refund from the authorities if you pay more tax in a fiscal year than you are liable to pay. Following are some of the instances when you might be eligible to receive tax refunds:
- If you self-assess your tax and it is more than you are supposed to pay.
- When you calculate your advanced tax on your estimated income, and it is more than your actual tax liability.
- In case tax deducted at source by employer from salary, interest, professional or any other income is higher than tax payable on regular assessment.
- If you pay professional tax or any other type of tax that is not applicable.
- When you receive tax refunds due to any scheme or special provision.
- In case you are eligible for tax deductions or exemptions.
- In case you have contributed to certain specified savings schemes or investment plans like Public Provident Fund, Equity Linked Savings Scheme, National Savings Scheme etc.
What are the different types of income tax refund statuses?
After filing your return, you will want to know the status of your refund. The Income Tax Department has made classification of different refund statuses for taxpayers.
Understanding the meaning of refund status will help you track your tax refund. It will also help to determine the next course of action that you need to take as a taxpayer:
- No E-filing has been done for this assessment year
This means that you have either not filed your return at all or done it manually and not verified it correctly. In this case, you need to cross-check the AY that you have checked your refund status for. You also need to check whether you have missed filing your return.
- Under processing
This denotes that the income tax department has not yet processed your return. In this situation, confirm whether you have filed your return and duly verify it. You can check your refund status after a month to see whether it has been updated or not.
- Refund paid
In this case, the income tax department has sent the refund to you in any of the prescribed payment ways. If you have not received it yet, in case of direct bank transfer or cheque, contact your bank, and in case of demand draft, check with the post department.
- Processed with no demand no refund
This means that you have filed for a refund in your return, but according to the income tax department’s calculation, you are not eligible for a refund. This is possible in case of a mismatch in TDS data or improper or incomplete filing of sections during the original filings.
If such a situation occurs, you can either revise your return or understand the intimation sent to you as per section 143(1). You can then file a rectification return so as to claim your refund.
- Refund failure
This means that the income tax department has sent a refund to you, but it was unable to reach you either because your bank details were incorrect or the address it was sent to was wrong. In this case, you need to log in to the official website of the income tax department and provide the correct bank details and prevalidate your bank details. After this, you need to raise a ‘Refund Reissue’ request from your account.
- Demand determined
In such a case, not only does the income tax department reject your request for refund, but it also finds out about an outstanding demand of unpaid tax.
You will receive a notice that will state the reason for the problem, like improper filing of tax details while filing, mismatch in TDS, not sharing proper income information, etc.
In case you find that your request was wrong, pay the outstanding tax, and in case you find a mistake in calculation, you can file a rectification.
- Case transferred to assessing officer
In case of this income tax refund status, the IT department requires some clarification regarding the income tax return that you filed.
The Jurisdictional Assessing Officer will be discussing things with you. This can also mean that you have some past tax outstanding with the department that will be balanced by the income tax refund that you requested.
- Rectification processed, refund determined
This is for taxpayers who have received an intimation to rectify their original return. The rectified return has either been partially or completely accepted by the IT Department. This message means the IT department has calculated and credited the refund amount.
- Rectification processed demand determined
This income tax refund status means that you have received intimation to rectify the original return, and the department has completely or partially accepted your rectified returns.
However, according to the department, you still have outstanding tax to be paid. You will receive a message stating the exact amount outstanding, which you need to pay within 30 days.
- Rectified processed, no demand no refund
This means that you received a message to rectify your originally filed return and this has been partially or completely accepted by the IT department. However, after the rectification, the authorities have found out that neither you have any outstanding tax yet to be paid nor do you owe any tax refund. For this, you will receive a new intimation.
How can you check income tax refund status?
There are two different ways using which you can check your income tax refund status. These are:
- TIN NSDL Portal
Here are the steps that you can follow to track your income tax refund status via TIN NSDL website:
Step 1: Visit the official website of TIN NSDL.
Step 2: Enter your PAN number, select your ‘Assessment Year’, and enter the ‘Captcha Code’.
Step 3: Click on ‘Proceed’, and after this, you will be able to view your income tax refund status.
- Income tax e-filling website
Mentioned below are the steps that you can follow to check your income tax refund status on the e-filing portal:
Step 1: Visit the official website of income tax e-filling.
Step 2: Log in to your account by providing the ‘USER ID’, which is usually your PAN number, ‘Password’ and ‘Captcha Code’.
Step 3: Select the ‘View Returns/Forms’ tab.
Step 4: A new page will open; look for ‘Select An Option’. A drop-down menu will open, from which you need to select the ‘Income Tax Return’ option.
Step 5: Enter your assessment year and then click on submit.
Step 6: After this, select the relevant ITR acknowledgement number, and you will be able to view your income tax refund status.
Step 7: On your screen, you will be shown any of the three options, namely ‘Refund Issued’, ‘Refund Failure’ or ‘Refund Kept on Hold’.
In case of ‘Refund Issued’ you will also receive mode of payment, date of refund and the amount. In case of ‘Refund Failure,’ you will also be communicated the reason behind it, and for this, you can raise a request for re-issuing of refund via the portal.
In case it is ‘Refund Kept on Hold’, a link will be available to respond to the outstanding demand.
Even a response can be shown that reads ‘No Records Found’. This means that the tax department is yet to issue details regarding tax refund.
How is income tax refund calculated?
In order to calculate tax liability, you need to know your taxable income or the amount of your income on which tax is due. Your taxable income might include salaries, wages, bonuses, business income, return from investments, etc. When you are calculating your income tax liability, you should take all deductions and exemptions into consideration.
After calculating the tax liability, you need to subtract the amount that you have already paid. The difference between the two amounts is the tax refund that you will receive.
Income Tax Refund = Total Tax Paid for the FY – Total Tax Payable for the FY
When you pay your total tax for a year, it might include advanced taxes, tax collected at source, tax deducted at source as well as self-assessment tax. In this case, you end up paying more than your actual tax liability. You are eligible to claim a tax refund in this situation.
How to claim income tax refund?
Income tax refunds are processed and refunded by the income tax department. To claim your income tax refund, all you have to do is file your income tax return on the official e-filing portal.
- While filing your return, you need to declare your actual income, tax paid and deduction details.
- You need to refer to form 16, TDS slips from bank interest form 24AS, and self-assessment taxes paid etc., so that you provide all the correct information.
- Do not forget to submit form 12BB to your employer, which contains all your investment declarations.
- Make sure to provide information regarding deductions applicable as per section 80 of income tax, like leave travel allowance and HRA. Your employer will calculate your TDS according to your investment declaration form.
- After filing your ITR, make sure to verify it either online or physically. You can complete verification using the electronic verification code sent to your registered mobile number. Or you can do so offline by posting a signed copy of ITR form V acknowledgement.
- Your income tax refund will be credited to your bank account within 45 days of processing your ITR. In case of delay, you can check with the Centralised Processing Centre.
- The due date for claiming a refund is the same as the last date to file the return.
How is income tax refund payment made?
You can receive your income tax refund in four ways, and they are:
- Cheque: A physical cheque will be sent to your address by the income tax department. After receiving the cheque, you can encash it at your bank.
- Direct Bank Transfer: This is the most preferred mode of receiving your refund. In this method, the income tax department credits your refund directly to your linked bank account.
- Tax Credit in Your Account: In this method, your refund is directly credited to your tax account. This is quite convenient in case your tax for the current assessment year is already paid.
- Pay Order or Demand Draft: In this method, you will receive your refund amount through a demand draft or pay order at your address. You can encash this demand draft or pay order at your bank.
This article gives you detailed knowledge about how to check your income tax refund status after filing your return. In case there is a refund failure status or no refund, you need to understand the actual reasons behind it and rectify it if it is wrong.
The income tax department offers a number of ways to fix a problem related to income tax return filing. You just need to understand what each status means and take the requisite steps.