Income Tax Refund Status: Check ITR Refund

The tax refunds, whenever applicable, are made in two different means to all the tax payers:

• RTGS / NECS: In order to enable direct credit of the refund amount to the bank account of the tax payer, the taxpayer's correct bank A/c (at least 10 digits), MICR/ IFSC code of the bank branch, and required communication address are mandatory.

• Paper cheque: The standard paper cheques, wherever issued, require the current bank account no and the taxpayer's correct address as mandatory information. 

How to Check Income Tax Refund Status Online?

The Income Tax Department offers an online facility to track the Income Tax Refund status. 

Taxpayers can check the status of their refund 10 days after they send the refund. You will be required to enter your PAN number and choose the year of assessment to track.

You will have to finish the e-filing process to obtain your Income Tax Refund.

In order to check your Income Tax Refund Status Online, you are required to follow the steps below:

Step 1: Log in to the official website for e-filing with the User ID, Date of Birth or Date of Incorporation, Password, and Captcha.

Step 2: Visit ‘My Account’ and click on ‘Refund/Demand Status’.

Step 3: The details below will be displayed:

• Assessment Year

• Status

• Reason (For failure of refund, if any)

• Mode of payment

If the actual tax paid by a taxpayer to the government is cumulatively more than the TDS, self-assessment tax, and advance tax, then that taxpayer is eligible to get an income tax refund.

How Income Tax Refund Is Processed

Once the taxpayer files the Income tax return, it is processed by the IT (Income tax) authorities at CPC, Centralized Processing Centre in Bengaluru. While processing the income tax return forms, if any tax reimbursement is payable to the taxpayer, the income tax refund orders are generated and transferred to the IT refund banker.

How Is the Payment of Income Tax Refund Done?

Usually, the Income-tax refund amount is credited directly to the taxpayer’s bank account based on the details furnished by the taxpayer in the Income tax return. However, in addition to the account transfer, the tax refund can also be paid to a taxpayer by:

1. Direct Credit of Income Tax Refund:

   Income tax refunds are paid either directly through NECS/RTGS or via a cheque. So make sure that you mention complete account details – bank account number, IFSC of the bank branch, and your communication address. It will enable easy transfer of income tax refunds directly to your bank account.

2. Income Tax Refund through a Cheque:

   In case your bank account details are unclear or improper, the refund is paid through a cheque to the a/c number mentioned in the income tax return.

How to Claim Income Tax Refund?

 “Death, taxes, and childbirth! There's never any convenient time for any of them.” 

    ― Margaret Mitchell

It doesn’t matter how inconvenient it is for all of us to pay taxes, but getting a tax refund is something we all eagerly look forward to. In fact, many of us view it as a bonus paid by the government.

However, the irony here is that you overpaid your own money as taxes and now have to claim by filing a tax refund. 

Quite often, most people end up paying higher taxes than their liability, making them eligible for tax refunds. Although the IT department has fixed the tax rates for individuals based on their income slabs, people often pay excess tax for various reasons. 

Sometimes, it might be due to them failing to make their investment declarations on time, or because taxes paid in advance due to an anticipation of a hike in income which didn’t materialize, etc. Besides these obvious reasons, there are also some other scenarios where tax may be deducted from your investment sources, such as Fixed Deposits, etc.

The Income Tax Department allows such people to claim a refund for the extra tax they have paid, which is known as Income Tax Return (ITR). Since one’s hard-earned money is at stake, it is really important for one to be clear on the whole process of how to claim her/his tax refund from the Income Tax department.

In this article, we will discuss claiming income tax refunds.

1. Always Remember the ITR (Income Tax Returns) Filing Date

   One can claim her/his income tax refunds while filing her/his ITR for that particular financial year. Usually, the deadline for filing the ITR is July 31st of every financial year. One should try to avoid the last minute rush and file her/his ITR well before the given deadline. It is best to avoid any hassles when the deadline is close.

2. Keep all the important documents handy

   It’s always recommended to keep all the required documents handy before you start the process of your ITR filing. This list of relevant documents includes salary statements, bank statements, business income statements (for businessmen), Form 16 (either from your employer/bank) to support your investment, other investment proofs and supporting documents, interest paid certificates, 26AS tax credit extract, etc.

3. File your Income Tax Returns (ITR) 

   The next step is to, finally, file the ITR. To file your Income Tax Returns, you have to start by filling up a form where you must fill in details such as your name, address, gross salary, taxable income, TDS (if applicable), and the refund due, total due, etc. 

   This form will record all your financial information for that particular financial year. Of course, you can always seek help from a financial advisor/Chartered Accountant to file the ITR on your behalf. Or else, you can do it yourself as the form is self-explanatory.

4. Know your refund amount

   After submitting the form, you can determine how much refund you’re entitled to in the refund column. To get an idea of your refund amount, you need to first click on the ‘Validate’ option, which is available on the ‘Taxes Paid and Verification’ page. Then, note down your refund amount and save a copy of the generated ITR-Verification receipt.

5. Send the ITR-V receipt to the Income Tax Department, Bangalore

   The amount displayed in the refund column is what you need and are entitled to. To get the refund of this amount, you need to sign the ITR-V receipt and post it to the Income Tax office. The address of the Income Tax office is already mentioned on the form.

6. Getting your ITR refund

   Once your ITR-V form reaches the income tax office, you will receive a text message notification from them. However, please be careful and accurate, as the IT department will cross-check the figure sent by you.

   Once they have verified the amount, they will process your application, and the amount will be credited to your bank account. In case they find a discrepancy between the amount shared by you and the amount calculated by them, your application will be rejected.

   You will be notified in either of the cases. The proceedings will be communicated to you by text message and/or email on your registered phone number and email address. The refund can take anything from 1 month to 4 months to get credited to your bank account.

In what different ways can you claim your income tax returns help you?

• It helps you get loans easily and smoothly, as almost all the major banks ask for a copy of your tax returns before processing your loan request. 

• Visa processing is another benefit associated with ITR filing. Most foreign consulates ask candidates to present their ITR receipts (of at least the past 3 years) when they appear for the visa interview, especially if one is traveling to the UK, US, Europe, or Canada. 

Producing your ITR receipt shows that you have a steady source of income in India, and hence, there are strong chances that you will return to the country for good. 

Your ITR-V receipt also helps you buy a life cover if you are planning to buy one in the range of Rs. 50 lakhs or more. This is because; your income is one of the most important deciding factors for the insurance companies to calculate the sum insured of your term cover.

How to Check Income Tax Refund?

• You can easily check your Income tax refund status online on the TIN-NSDL website.

• Once on the website, you will need to log in using your PAN card number and the year of assessment to check your Income tax status.

• Once the IT authorities process the income tax refund and send to the refund banker, income tax status will reflect on their site within 10 days. 

Checking Income Tax Refund Status on the E-Filing Website?

• Here’s the process of checking the Income Tax Status on the e-filing website of the income tax department of India:

• First things first, log on to the official website of the income tax department of India (www.incometaxindiaefiling.gov.in) 

• Now, enter your PAN number, DOB, and password. Carefully verify the captcha code to log in to your income tax account.

• Once you’re logged in to the website, click on the View Returns/Forms tab!

• From the drop-down menu, select the Income Tax Returns option and pick the tax assessment year to check your income tax status.

• Now click on your acknowledgment number.

• A pop-up will appear on the screen. This pop-up will show you the entire timeline of income tax e-filing, right from the date when you filed the ITR to the date of verification/e-verification and the date when your income tax return was finally processed and the income tax refund was issued.

Checking Income Tax Refund Status on TIN/NSDL Website

National Securities Depository Limited (NSDL) governs The Tax Information Network (TIN) on behalf of the Income Tax Department of India. TIN acts as the repository of countrywide tax-related information.

• Visit their website and click on the services section. Then, click on Income Tax Refund Status.

• Now, enter your PAN number and select the year of tax assessment from the drop-down menu. Now, verify the Captcha code.

• Now, hit the submit button. You will now be able to see your Income-tax refund status.

• Income Tax Refund Claim Procedure

• If you want to claim the excess tax paid during a fiscal year, you can claim your tax refund while filing your ITR for that particular year. Remember, it is important to file your ITR before 31st July, every fiscal year.

• You can easily file your ITR by uploading the java utility form or excel sheet with all the required information in the online forms (if only you are eligible to file ITR 4 or ITR 1 form).

• After filling the relevant ITR form, you need to click on the ‘validate’ This button is available on the verification sheet. Your tax refund will then be automatically calculated based on the data filled by you in the sheet. And your income tax status will be shown on the screen.

• The total amount that reflects as the ‘refund’. This is the amount that you may claim as your income tax refund. The refund amount is then calculated by the IT department after processing your ITR form and the verification of your refund claim.

• Once the claim is processed, intimation is sent to you. Usually, the intimation shows up as one of the below mentioned messages:

  • “Your ITR matches with the Income-tax department, and you don’t need to pay any further tax for the current fiscal year.”

  • “Your tax calculation doesn’t match the income tax department, and you are required to pay the tax demand”. the additional tax.” Or it may read as “Your income tax refund claim has been accepted partially” or “Your income tax refund claim has been rejected.”

  • If your income-tax refund calculation matches with the calculation of the income tax department, then your refund claim will be accepted.

• You will receive intimation over your registered email address in case you’ve e-filed income tax returns. In addition, you will receive an SMS message stating that the ITR for your PAN Card Number and Acknowledgement Number has been processed.

• In case the Income-tax department requires more information, or if your case is under scrutiny, you will receive a notice from the income tax department under a different section instead of section 143(1).

What are the Different types of Income Tax Refund Status? 

• Not Determined- It implies that your ITR has not been processed, and you need to check your income tax status after a few days.

• Refund Paid- It implies that your income tax refund has been sent to you by cheque or has been credited to your bank account.

• Refund Failed: This status appears when the refund amount could not be credited to your bank account because of improper bank details, etc.

• Refund Expired- The refund cheque issued by the Income-tax department is valid for a period of 90 days. If it expires, then you will have to get a refund cheque re-issued in your name.

• The Cheque has been Encashed- This message reflects when the cheque sent by the IT department has been received by you and has been encashed.

• Refund Returned - In case the cheque is sent back or returned to the Income-tax department, this status appears. In such cases, your refund will be canceled, and you will have to send a request to re-issue your income tax refund.

• Refund Adjusted against Last Year’s Outstanding Demand- In case you have a pending tax demand from the income tax department for the antecedent fiscal year, your income tax refund may get adjusted against your income tax refund. Before adjusting your income tax refund against last year’s tax demand, the income tax department sends an intimation notifying the same to the taxpayer.

ITR Refund Status Process

Most of us wait for the last moment to make our tax investments which leads to incorrect disclosure of investments, and further, you end up paying more taxes. This extra income tax paid in addition to actual tax liability leads to a situation of the tax refund. The process of tax refunds has been a time consuming process over the years. The whole process of going online even has not helped a great deal. But if you are expecting a tax refund, then it is important to take a few steps which will help you in expediting the process. You can check and provide accurate bank account details like bank account number and also the proper address to get the tax refund directly credited to your account.

In case of excess deduction of tax at source, a claim of refund of such excess Tax deduction at source (TDS) can be made by the deductor. The excess amount is refundable as per procedure laid down for refund of Tax deduction at source (TDS). The difference between the actual payment made by the deductor and the tax deducted at source or deductible, whichever is more, will be treated as the excess payment made. This amount is to be first adjusted against any existing tax liability under any of the Direct Tax Acts. After meeting such liability, the balance amount is to be refunded. Below is the tax refund process:

• Filing the return on time is the first and foremost requirement for claiming the Tax refund by providing adequate investment details.

• File your return online so that it is processed faster and doesn’t have to deal with bureaucracy.

• Check your Income tax return status to see if it’s reflecting the tax refund correctly.

• If your Tax return shows a Tax refund, filing the return is all you need to do. The IT department will send the refund by post (cheque) or direct credit to your bank account.

• You should provide proper details of your bank account like MICR Code, bank account number, and also the proper address to get the Tax refund amount directly credited into your account.

Opt for direct credit so that you don’t have to deal with postal delays.