Sometimes, an individual may end up paying taxes more than they are actually required to. This may be because of tax deducted at source or an incorrect income tax calculation. In such cases, you can claim an income tax refund. General query is after itr processed how many days to refund?
- What is Income Tax Refund?
- Calculation of Income Tax Refund
- How is Income Tax Refund Processed?
- Eligibility for ITR Refund
- Claiming of Income Tax Refund
- How to Check Income Tax Refund Status
- Meanings of all Income Tax Refund Status
- What to Do If Refund is Not Processed?
- Interest on Delayed Income Tax Refund
- Setting-Off Outstanding Taxes against Refunds
1. What is Income Tax Refund?
Sometimes, an individual may end up paying more tax than they are liable to pay. For instance, if advanced tax or tax deducted at source (TDS) is more than the tax you are due for, then you can claim an income tax refund. ITR refunds are a way to ensure that you receive back any extra tax that you have paid.
The government has made this process easy through online income tax refunds. After you have filed your IT returns and verified the same, income tax refund time taken is usually 20-45 days after ITR has been processed. If it takes longer, you should follow up with the Centralised Processing Centre (CPC). Income tax refund tracking can be done online.
2. Calculation of Income Tax Refund
When you are filing your IT returns, you can do your income tax refund calculation after taking all deductions and exemptions into consideration.
Income Tax Refund = Total Tax Paid for the Year – Total Tax Payable for the Year
The total tax paid for the year will include any advance taxes, TDS, TCS (tax collected at source), and self-assessment tax. In case this exceeds your actual tax liability, you can claim an ITR refund. When using an income tax calculator, you can use the same for income tax refund calculation.
Here is an example of all that may go into your income tax refund calculation:
| Income Tax Refund Calculator | Amount |
|---|---|
| Income that is taxable (A) | Rs. 5,00,000 |
| Gross tax liability on above (B) | Rs. 12,875 |
| Less: Foreign tax credit (if applicable) | Rs. 1,000 |
| Net tax liability | Rs. 11,875 |
| Add: Interest on tax liability (Sections 234A, 234B and 234C) | NIL |
| Total tax liability | Rs. 11,875 |
| Less: Taxes paid (C) | Rs. 25,000 |
| Tax refund | Rs. 13,125 |
As you can see, when B<C, you will be eligible for an income tax refund.
In case C<B, then you will be liable to pay income tax in lieu of your tax liability.
3. How is Income Tax Refund Processed?
The processing of income tax refund is rather straightforward. Once you file your returns, verify the same either electronically or by posting a physical copy of the ITR-V acknowledgment, refund processing will start. The CPC will verify your taxes, check if the tax paid is higher than your tax liability, and begin processing the refund. Once the refund processing is complete, and an income tax refund is generated, it will automatically be credited to your bank account.
4. Eligibility for ITR Refund
You are eligible to receive an Income Tax Refund from the tax authorities if the taxes you have paid during a fiscal year are more than your actual tax liability. Some reasons why a taxpayer might have paid excess tax are:
- Advance tax paid based on self-assessment is higher than actual tax liability
- Tax Deducted at Source (TDS) deduction by employer is higher than the tax liability
- Error in tax calculation resulting in higher tax payout than actual tax payable
- Double taxation of income earned in a foreign country
However, in order to get a refund on the excess tax paid, you have to file your ITR correctly and get it verified.
5. Claiming of Income Tax Refund
There is no separate process to claim an ITR refund. All you need to do is file your returns for claiming an income tax refund. If you are eligible for a tax refund, be it claiming a TDS refund, double-taxation refund, or under any other circumstance, all you need to ensure is that you file your taxes correctly and verify your filing.
- Ensure that you file taxes before the due date. Usually, the 31st of July is the last date to file ITR for individuals.
- To be eligible for getting a refund, you must file your taxes correctly. Make sure that all the details imputed in the ITR form are correct. Refer to Form 16, Form 24AS, TDS slips from bank interest, self-assessment taxes paid, etc., to make sure you give the correct information.
- Once you are sure that you have all the right information, the next step is to verify whether you are eligible for a refund.
- Know the amount of refund you are eligible for. This makes it easy to track the credit you are supposed to receive.
- Once you file your ITR returns, don’t forget to verify your returns. This is just as important as filing returns. ITR filing verification can be done online or physically. Electronic verification is done via OTP generation linked to your Aadhar or an electronic verification code (EVC) sent to your registered mobile number. Alternatively, you can physically verify your ITR filing by posting a signed copy of the ITR Form V acknowledgment to the CPC within 120 days of filing your returns.
The income tax refund should be credited to your bank account within 45 days of ITR processing. If it takes longer, you should check with the CPC on why it is getting delayed.
6. How to Check Income Tax Refund Status
As already mentioned above, you can track ITR refund status online on the income tax e-filing portal or through the NSDL website.
Income Tax E-Filing Website
- Go to incometaxindiaefiling.gov.in/home
- Login to your account using your USER ID, which should be your PAN number, the password, and the captcha code.
- Go to the “View Returns / Forms” tab.
- On this page, look for the ‘Select An Option’ and then click on ‘Income tax Returns’ in the drop-down menu.
- Fill in the assessment year and then submit.
- Click on the relevant ITR acknowledgment number to check your ITR refund status.
NSDL Website
- Go to tin.tin.nsdl.com/oltas/refundstatuslogin.html
- Enter your PAN details, assessment year, and captcha code.
- Click on submit to view your ITR refund status.
7. Meanings of all Income Tax Refund Status
You’ve logged into your account and want to track your ITR refund status. Here are the different possibilities along with the meanings:
| Status | Meaning |
|---|---|
| E-filing not done | This means you have either not filed your return, not verified it correctly, or done it manually. You have either not filed your return or filed it manually. Check your filing to rectify it. |
| Refund is already credited to your bank. Please contact your bank. | This means that the CPC has processed your refund, but it has not been credited to your bank account yet. Check with your bank or the CPC on how to proceed. |
| Refund has been encashed. | This is self-explanatory. Your ITR refund has been processed, credited to your bank account, and has been encashed. If there is a discrepancy, you need to check that with your bank. |
| Refund Not Determined | The Income Tax department has determined that you are not eligible for an ITR refund. Or you have not filed your taxes correctly. Do check your filing once again. |
| Unable to credit refund as the account number provided by you is incorrect. | If you have provided an incorrect bank account number, then this is the status you might receive. Don’t worry, as you can update your bank account details and request for the refund to be processed. |
| Defective return u/s 139(9) | If there is an error in your ITR filing, you will receive this status. For the exact defect, check your tax filing or the comments. |
| ITR processed but need a rectification request | If the Income Tax Department finds a mismatch in the taxes you file and their records, then you will get this status. |
| Return submitted; processing rights transferred to Jurisdictional Assessing Officer. | The Jurisdictional Assessing Officer will be processing your request. |
| Return Submitted and not verified. | You may have filed your returns but forgotten to verify them. Either e-verify your returns or submit ITR-V to CPC within 120 days of filing your returns. |
| Return Processed with No Demand and No Refund | This means that your ITR has been processed, but you are not eligible for a refund. |
| Return Processed, and Tax Demand Determined | This means that your ITR has been assessed by the IT department, and a tax payable has been determined. |
| Return Processed and Refund returned Unpaid | This status means that either your bank account details or your address for the refund are incorrect. Rectify the same to receive a refund. |
| Return Submitted and Under Processing | This implies that your Income-tax Return is still being processed. |
| Return Processed and Refund Paid | This is self-explanatory once again. It means that your refund has been processed and credited to your bank account. |
| Return Submitted and Verified | The status calls for a waiting game. It means the refund will be processed soon. |
| Invalid Return | If the Income Tax Department finds that your returns are invalid, this is the status you will see. You will have to file your returns again. |
| Return Processed. Refund Adjusted Against Demand | If the IT department finds that there is an outstanding amount from earlier, it may adjust the same with your refund claim. |
8. What to Do If Refund is Not Processed?
Usually, the CDC processes income tax refund between 20-45 days after processing your ITR. In case you have not received your refund, the first thing to do is to go to the e-filing portal or NSDL and check the status of your refund. Depending on what it says, you will have to either resubmit your returns, wait for a little while longer or reach out to the jurisdictional assessing officer to find out the reason for the delay.
You can reach the Notification and Processing center at 18001034455 or +91-80-46605200 from Monday to Friday from 8 AM to 8 PM for any queries you may have. You can also email at refunds@incometaxindia.gov.in.
9. Interest on Delayed Income Tax Refund
In case payment of income tax refund is delayed due to some issue at the Income Tax Department’s end, then according to Section 244A of the Income Tax Act, you are eligible to receive interest on the income tax refund.
- The government has to pay interest on a refund if the total refund amount is equal to or more than 10% of the tax actually paid.
- The IT department will pay an interest of 0.5% from the 1st of April to the date when the refund is granted as long as you have filed returns before the due date.
However, do note that interest will not be paid if the total amount of refund is less than 10% of the tax.
10. Setting-Off Outstanding Taxes against Refunds
In some instances, you may notice that the income tax refund you receive is lower than what you had claimed. If you have an outstanding income tax from another year, then it is possible that the Income Tax Department will adjust it against your claim.
However, do note that the IT Department has to send you an intimation about this as per Section 245 of the Income Tax Act. You have 30 days to accept or reject this claim. In case you do not respond, then the IT Department can go ahead with it.
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