What is an Income Tax Refund?

When the amount of Income Tax paid by the taxpayer is more than the amount of Income Tax payable. Then the amount paid by the taxpayer in excess is known as Income Tax Refund. Refunds are processed by Income Tax Department after your Income Tax return has been processed.
For example, Mr. Jai paid Income Tax of Rs. 14,000/- but the amount of Tax payable was only Rs. 10,000/-. Thus, Mr Jai will get Income Tax refund of Rs. 4,000/-.
The taxpayer can check the income tax refund status on TIN-NSDL by simply providing their PAN at the TIN-NSDL website and the relevant assessment year.
Income tax refund status can be checked online by simply by providing your PAN and the relevant assessment year.
The official income tax e-filing portal no longer has an option to check on tax refund statuses.
Accordingly, your refund bank will credit Income Tax refund, after your Assessing Officer forwards your money to the linked bank account.

Modes to receive Income Tax Refunds- The tax refunds are made in two different means:

  • RTGS/ Electronic clearing system (ECS) – Taxpayer is required to provide bank account details, MICR/ IFSC code of the bank branch in the ITR .
  • Cheque or demand draft – Cheque or demand draft issued to the taxpayer requires correct address and contact details.

How to check Income Tax Refund status?

You simply check your refund status in just 5 easy steps:

  1. Open TIN-NSDL website – https://tin.tin.nsdl.com/oltas/refundstatuslogin.html
  2. Enter your registered PAN number
  3. Select the relevant Assessment Year from the drop-down list
  4. Enter the ‘Captcha Code’ showed on the screen
  5. Click the ‘Submit’ button

It will show the following statuses:

  • No E-filing is done for this assessment year – It means that you have not filed the return for that relevant assessment year.
  • Refund Not determined – It means that either the taxpayer has not sent the ITR V to Central Processing Centre (CPC) Office Bangalore or the Income Tax Department has not received it. In such case, resend copy of ITR-V or you can also e-verify your return online.
  • Refund paid– It means that your refund is paid but if you still haven’t received the refund amount yet, check all the details like PAN No., Bank Account number, and other bank details or raise a request for Refund Reissue.
  • No demand, No refund – It means no excess tax is paid to the income tax department. But it might be possible that your refund is denied by Income Tax department, this can be the case because of TDS mismatch. You can now rectify the errors and file a rectification return to claim your refund.
  • ITR is being processed, refund determined and sent out to refund banker– This status means that your refund has been accepted by the Income Tax Department.Income Tax Department sends the refund details to the Refund Banker who will process your refund.
  • Refund unpaid – It means that Income Tax Department has sent the refund to you, but the address provided to the tax department is wrong, hence the cheque was undelivered. (Or) You have submitted wrong bank account details to the tax department and hence the refund was not processed. Once you have identified the reason for refund unpaid, you are required to login to your income tax e-filing account and then correct the information with the department. After making corrections, you can apply for the “Refund Reissue Request” from your income tax e-filing account.

Follow the below steps to raise a Refund Reissue Request:

1. Go to incometaxindiaefiling.gov.in and Enter User ID which is your PAN, Password and captcha code to log in. After login go to “My Account” and click on service request.

2. After clicking service request, select the request type- New Request and click submit button.

3. Select “Refund Reissue” from the dropdown and click submit button.

  • Demand determined– It means that your refund has been rejected by the Income Tax department as you have an outstanding tax due. You will soon receive a notice of demand from Income Tax department. If there was indeed an error, pay the tax demanded by the IT department or where you disagree with the demand, you can file a rectification in support of your refund claim
  • Contact your jurisdictional assessing officer–It means that for the income tax return that has been filed, further clarification is required from the taxpayer. It can also be the case where you have outstanding taxes, which will be further adjusted against the tax refund requested by you. On the receipt of such message, contact your jurisdictional assessing officer.

Interest Payable on Delay in Income Tax Refunds

Where in case taxpayers do not get their refund in due time in such case interest of 0.5% (on your refund) will be paid for every month or part of a month comprised in the following period.

Return filed before Due Date – From 1st April of the assessment year to the date on which the refund is granted.
Return is filed after Due Date – From the date of filing of return to the date on which the refund is granted.

Setting-Off Outstanding Taxes against Refunds
Where a taxpayer has some previous outstanding taxes to pay, then Tax authorities will set-off such refund amount against the outstanding taxes and issue an intimation u/s 245.

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