Knowing your eligibility for an income tax refund could be beneficial for many reasons. A primary reason is that it can give you a financial boost. Secondly, it means that you have paid more taxes than required by law, and that you should revisit your tax filing approach.
Moreover, it serves as an incentive to learn how to claim tax refund or check the status of a refund request. Thankfully, these processes are much simpler thanks to digitisation. Read on to learn more about the income tax refund process and different modes to check the status of claims.
If you have paid more income tax than you were supposed to, you may be eligible for an income tax refund. You are eligible for an income tax refund if you fall under any of the following categories:
You have paid more income tax than your actual tax liability
You have made excess tax payments due to wrong or double deduction of taxes
You have paid advance tax, but your final tax liability is lower than the amount paid
You have claimed excess tax relief or deductions
There are mainly 2 types of income tax refunds:
Refund due to excess tax payment: This type of refund arises when you have paid more income tax than what was due, and the excess amount is refunded to you.
Refund due to excess TDS (Tax Deducted at Source): This type of refund arises when your employer or any other deductor has deducted more tax than what was due, and the excess amount is refunded to you.
The second type is a common occurrence, which is why it is important to learn how to claim a TDS refund.
Starting with the tax refund process, you must have the documents required. Here is the list of documents required:
Form 16: This form is issued by your employer and shows the tax deducted from your salary.
Form 26AS: This form shows the details of the tax deducted at source (TDS) and advance tax paid by you.
Bank statement: This shows the details of the tax payments made by you, such as self-assessment tax, advance tax, or tax on regular assessment.
ITR-V: This verification form must be submitted to the Income Tax Department after filing the return.
To claim an income tax refund, you need to fulfil the following requirements:
You should have filed your income tax return for the relevant assessment year
You should have accurate details of the tax payments made by you during the relevant assessment year
You should have proof of TDS or advance tax payments made by you
You should have a valid bank account to receive the refund
With a clear indication that you are eligible for an income tax refund, the next step is to learn how to claim an income tax refund online. Here's a step-by-step guide to claiming your income tax refund.
Step 1: Visit the income tax filing portal and log in with your existing credentials. If you are a new user, register with your PAN Card
Step 2: Navigate to the ‘Download’ tab on the portal and select the current assessment year along with the ITR form you need
Step 3: Once you download the Excel sheet, enter the details mentioned in your Form 16
Step 4: If you have paid more tax, the refund amount will be calculated automatically and displayed under the ‘Refund’ field of your ITR form
Step 5: Verify the details you have entered, and a .XML file will be generated and saved on your computer
Step 6: Upload the generated XML file on the portal by selecting ‘Submit Return’
You will have to fill the income tax refund form when submitting these documents. Additionally, when learning how to claim a TDS refund online, remember that you may have to file Form 13 or 15G, based on your claim.
Checking your income tax refund status can help you stay informed about the progress of your refund claim and give you an idea of when you can expect to receive the funds.
There are different ways to check your income tax refund status online. Some of the most common ways include:
Through the official income tax e-filing website
Through the TIN (Tax Information Network) NSDL (National Securities Depository Limited) website
Through the mobile app provided by the tax authorities
By calling the toll-free customer care number of the tax department
To check your income tax refund status, follow these steps:
Step 1: Visit the official income tax e-filing website.
Step 2: Login to your account using your PAN (Permanent Account Number) and password.
Step 3: Go to the 'Refund/Demand Status' tab.
Step 4: Select the relevant assessment year for which you want to check the status.
Step 5: Click on the 'Submit' button to view your refund status.
Learning how to claim your tax refund is just one part of the process. Checking the status of the process is the other part, and it has the following benefits:
You can stay updated on the progress of your refund claim
You can track any discrepancies or delays in the refund process
You can plan your finances better by knowing when to expect the refund
There can be several reasons for this delay. Some of the most common reasons are:
Your refund may get delayed if you have provided incorrect information such as bank account details, address or PAN details
Your refund may get delayed if there is a discrepancy in your tax filing, such as incorrect TDS details or a mismatch in income
The Central Processing Center (CPC) in Bengaluru processes income tax refund claims. If there is a delay in processing your claim, it may take longer for you to receive your refund
Technical glitches or system errors may cause a delay in the processing of your income tax refund
Now that you know how to claim an income tax refund, how to claim a TDS refund, and how to check the status online, be sure to use these provisions. Claiming your income tax refund is crucial as you use the extra funds for your savings, investments, or other expenses.
You can file an income tax return if your income during the financial year exceeds the specified threshold limit. The threshold limit varies based on your age and income level.
No, filing an income tax return is not mandatory if your income is below the specified threshold limit. However, if you have paid any taxes during the financial year, filing a return will enable you to claim a refund.
Here, knowing how to get a TDS refund online is especially helpful as your employer or bank may have paid these taxes on your behalf.
If you miss the income tax return filing deadline, you can still file a belated return within a specified time frame. However, you may have to pay the penalty and interest on any outstanding tax liabilities.
After you file your income tax return, it typically takes around 20-45 days for the refund to be processed and credited to your bank account, provided all the details are accurate, and there are no discrepancies.