Don’t Leave Money on the Table: How to Check and Claim Your Income Tax Refund?

11 min read • Updated 29 June 2023
Written by Rohit

Have you ever heard of an income tax refund? It’s when the government gives back some of the money you paid in taxes because you overpaid them. It’s like finding money that you didn’t know you had! But did you know that many people don’t even know they are eligible for a refund or know how to claim it? That’s like leaving money on the table! So today, we will talk about how to check if you are owed a refund and claim it.

What is Income Tax Refund? 

Income tax is a tax that people have to pay on the money they earn from their jobs, businesses, or investments. When you file your Income Tax Return (ITR), you tell the government how much money you earned and how much tax you paid on that income.

Now, sometimes people end up paying more tax than they owe. This could be because they made a mistake while calculating their tax liability or because they are eligible for certain deductions and exemptions. In such cases, the Indian government refunds the excess tax paid to the taxpayer.

So, an income tax refund is the money the government gives you when you have paid more tax than you owe. 

The income tax refund is noted under sections 237 to 245 of the  Income Tax Act of 1961 (I-T Act). The income tax department sends the individual an intimation notice of the excess tax paid by them, and the individual would be eligible to claim the refund. The process of claiming the refund is easy. The refund usually takes 20-45 days after ITR is processed and verified. 

Eligibility of Income Tax Refund

You can claim the income tax refund if your taxes during a fiscal year are more than your actual tax liability. To be eligible for claiming the refund, you must fulfill any one of the following criteria:

  • The total advance tax you pay is more than your actual tax liability in a given financial year. 
  • If the actual tax you need to pay is lower after the resolution of the error in the assessment process.
  • If Tax Deducted at source (TDS) form salary, etc., exceeds the payable taxes. 
  • In case of non-declaration of the investments made in tax saving instruments. 
  • If you have paid taxes on your income to a foreign country with a Double Taxation Avoidance Agreement (DTAA) with India.

How to Claim Income Tax Refund?

An individual must file a correct ITR before the due date to claim Income Tax Refund. On successful verification of the ITR, the department will decide whether the individual is eligible for the refund. It can be a claim of TDS refund, double taxation refund or any other refund as applicable under current tax law. Keeping the following points in mind will help you in the process:

  • Ensure to file correct returns before the due date. 
  • While filing the return, you should check the total advance tax payments under Form 26AS. 
  • After correctly filling in all the details, the Income Tax Officer will verify the returns filed. 
  • On verification, the officer will approve the refund according to Form 26AS if the tax payments exceed the actual tax liability. 
  • The refund will be credited to the bank within 45 days of ITR filing.
  • Keep a check on the IT refund status on the e-filing dashboard.  
  • Ensure to provide the bank details when filing returns to simplify the refund process. 
  • Remember to verify the returns filed.

Due Date to Claim Income Tax Refund 

You can claim an income tax refund within 12 months of the relevant assessment year. However, the following pointers need to be kept in mind: 

  • You can claim Income Tax Refund only for six successive assessment years.
  • You will not receive any interest on the tax refunds if the delay is from your end. 
  • The total claim amount for one assessment year should not be more than ₹50 lakhs. 

Understanding the Income Tax Refund process

The Centralised Processing Centre (CPC) in Bengaluru is responsible for processing the income tax refund. After the individual files the return and the income tax officer verifies it, the income tax refund officer of CPC receives an order to process the refund.  The Income Tax Department can make the payment of the refund in any one of the following manners:

Refund via cheque

An income tax refund can be processed via cheque, drawing it in favour of the individual.

Refund via net banking/bank transfer 

This is the most preferred method of transferring the refund amount. The refund can be directly transferred to the individual’s bank account through net banking, NEFT/RTGS/IMPS. 

How to track the status of Income Tax Refund

The individual can track the status of their refund in two ways: 

  1. Through the official website for e-filing of the income tax. 
  2. Through the TIN NSDL website  

Checking the status of the IT refund through the Income Tax e-filing website

Step 1: Visit the  website. 

Step 2: Log in to the website by entering the user ID and password. 

Step 3: Click the ‘e-file’ option. 

Step 4: Select ‘Income Tax Returns’ and enter ‘View Filed Returns’. 

Step 5: Click on ‘View Details’. 

Step 6: This will show the details of the ITR filed, the date of issue of the IT refund, the amount refunded and the clearance date of any refund. 

Checking the status of the IT refund through the TIN NSDL website

The following are the steps to check the status of the IT refund through the TIN NSDL website: 

Note: An individual can check the refund status on this website 10 days after the Assessing officer has processed the refund to the refund banker. 

Step 1: Visit  website. 

Step 2: Enter the PAN details. 

Step 3: Select the assessment year for which the refund has to be checked. For example: for FY 2022-23, the assessment year will be 2023-24.  

Step 4: Click on ‘Submit’ after entering the captcha. 

Step 5: You will see a message on the screen.

Meanings of all Income Tax Refund Status Messages:

  • E-filing not done: This means the individual has not filed the returns. 
  • A return submitted and under process: This message is displayed when the ITR is still under process. 
  • Refund not determined: The Income Tax Department does not find the individual eligible for an income tax refund, or you have not filed the ITR properly. 
  • Defective refund under section 139(9): This message is sent when there is an error in the ITR filing. The individual needs to check the filings to know the exact defect. 
  • A return submitted but not verified: If the individual files the return but fails to verify it, they receive such a message when checking the status of their income tax refund. In such cases, either the individual should submit the return to CPC within 30 days of filing or can also e-verify their returns. 
  • ITR processed but needs a rectification request: This message is sent if the department finds a mismatch between their records and the taxes filed by the individual. 
  • Return processed with no demand and no refund: The message says that the returns have been filed and processed, but the individual is not eligible for any refund. 
  • A return submitted; processing rights transferred to Jurisdictional Assessing Officer: In such case, the Jurisdictional Assessing Officer will process the refunds. 
  • Return processed, and tax demand determined: When the ITR has been processed and tax payable has been determined. 
  • Return processed and refund returned unpaid: The message says that the return has been processed, but the bank account details are incorrect, so it cannot be refunded. The individual here needs to submit proper details to get the refund. 
  • Return processed and refund paid: The refunds have been processed and credited to the bank. 
  • Invalid return: The Income Tax Department finds the individual’s return invalid. Hence, you need to file the correct ITR.
  • Return processed. Refund adjusted against demand:  This happens when there is an outstanding amount from earlier, and the Income Tax Department adjusts the refund amount against that amount.

Interest in Delayed Income Tax Refund

A delayed income tax refund case arises when the Income Tax Department delays processing the refund for other reasons. In such a case, the individual will be eligible for interest on the income tax refund as per Section 244A of the I-T Act. 

  • The government will be responsible for paying the interest on the Income Tax Refund if they delay making the refund only if the amount is equal to or exceeds 10% of the actual taxes paid.  
  • In case of excess Tax Deducted at Source (TDS), Tax Collected at Source (TCS) or Advance tax is paid, then the assessee is eligible to claim a refund and interest. The Income Tax Department will be liable to pay interest at the rate of 0.5% every month or part of the month from the 1st of April to when the refund was granted as long as the individual has filed returns before the due date.

How to Apply for Refund Reissue?

If there is a delay in the income tax refund process, such as an issue with bank account information, address information or a departmental issue, the individual can raise a ‘Refund Reissue’ request to the IT department. The steps to raise a ‘Refund Reissue’ request is as follows:

Step 1: Visit the Income Tax Department’s website  

Step 2: Login by entering the user ID and password. 

Step 3: Click the ‘Pending Actions’ option on the dashboard. 

Step 4: Select ‘Refund Reissue’. 

Step 5: Enter ‘Create Refund Reissue Request’. 

Step 6: Choose the bank account to get the refunds and click the ‘Proceed to Verify’ option. 

Step 7: Submit the Electronic Verification Code (EVC) received on the mobile number or e-mail ID. 

Step 8: Click on ‘submit’. The request has been placed. 

Final Words

In conclusion, knowing how to check and claim your income tax refund is crucial for managing your finances effectively. By understanding the process and taking the necessary steps to claim your refund, you can ensure you are not leaving any money on the table. It is important to know your tax liabilities and ensure you are not overpaying. So take the time to check if you are eligible for a refund and claim it if you are. By doing so, you can put that money towards your financial goals and secure a better financial future for yourself.

Frequently Asked Questions (FAQs)

What will an individual do if the income tax refund is not processed?

If the refund is not processed within 20-45 days of filing the returns, the individual can reach out to the jurisdictional assessing officer to find out the reason for the delay in the refund. 

Does an individual need to submit any proof during ITR filing?

There is no need for any documents or proof at the time of ITR filing. Only Aadhaar details need to be submitted at the time of filing returns. 

Is there any taxation on the income tax refund?

No, the income tax refund does not attract any kind of taxes. However, if the individual receives interest on a delayed refund, such interest will be subject to taxes and must be reported under the head ‘Income from Other Sources’.

Can an individual update their details with the Income Tax Department?

An individual can update their details, such as mobile number, bank account details, etc., with the Income Tax Department just by visiting their official website.  

Is there any special case for an income tax refund?

In case of death, insolvency, liquidation, incapacity or any other cause, the assessee’s legal representative, guardian, receiver, or trustee can file for the income tax refund on behalf of the assessee under section 238 of the I-T Act. 

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