The income tax department also announced last year that it will issue only e-refunds. These refunds will be credited only to those accounts which are linked with Aadhaar, PAN and are pre-validated

 Income tax return filing last date (January 10) has passed. People who have filed ITR and have paid excess tax are now looking for their refund to be credited in their account. Last year, the process of claiming income tax refund was tweaked by the Income Tax Department. In order to claim an income tax refund, apart from filing an income tax return (ITR), you have to ensure that you have pre-validate your bank account in which you want to receive the income tax refund to be credited.

Aside from pre-validation, you also have to link your PAN card with your bank account. If both the documents are not linked, you will not be able to get the income tax refund in your bank account. The income tax department also announced last year that it will issue only e-refunds. These refunds will be credited only to those accounts which are linked with Aadhaar, PAN and are pre-validated on the income tax e-filing website, www.incometaxefiling.gov.in.

Income Tax Refund can be claimed when:

• You did not furnish all the investment proofs to your organization. As a result, the amount of taxes deducted by your employer exceeded your actual tax liability for the particular FY. 
• Excess TDS was deducted on your interest income from bank FDs or bonds.
• The advance tax paid by you on self-assessment exceeded your tax liability for the applicable FY as per the regular assessment.
• In case of double taxation

How to Claim Income Tax Refund?

Earlier, Income Tax Form 30 was required in order to claim an income tax refund. However, with e-transfer of refunds, it can now be claimed by simply filing the ITR, linking PAN with Aadhaar and validating the bank account. The ITR should further be verified, either physically or electronically within 120 days of filing. The excess tax for which a refund is claimed should be reflected in Form 26AS. Moreover, the refund is subject to verification by the Income Tax Department. It is credited only if the refund claim is found to be valid by the department.  

Ways to check Income Tax refund status?

1. On the NSDL website

• Step 1: Go to the NSDL website to track refund.
• Step 2: The following web page will appear. Fill in the details, including PAN and AY and click ‘Proceed’.
• Step 3: Your income tax refund status will be displayed, as depicted in the following image.

2. On e-filing portal:

• Step 1: Log into the e-filing portal of Income Tax department by clicking here.
• Step 2: Select View Returns/ Forms.
• Step 3: Go to ‘My Account’ tab and select ‘Income Tax Returns’. Click submit.
• Step 4: Click on the acknowledgement number.
• Step 5: A page showing your return details along with income tax refund status will appear.

ITR Refund Delay:

If you filed your income tax return for the Financial Year 2019-20 way earlier and haven’t received the refund yet, then you are not alone. A technical upgrade for faster processing of the tax returns could be one of the reasons behind the delay. Income tax department is moving to a new, technologically upgraded platform (CPC 2.0) for faster processing of ITRs. ITRs for AY 2020-21 will be processed on CPC 2.0. 

Kush Vatsaraj of TP Ostwal & Associates LLP said, "CPC 2.0 was announced officially sometime in 2019. The main reason was to cope with the increasing number of e-filed returns. Generally, refunds are processed quite quickly and smoothly especially for the majority individual taxpayers. But with covid, plus lack of funds with the govt, everything is delayed, including processing returns."

Many taxpayers who filed their income tax return for the year FY2019-20 around five-six months back are yet to receive refunds. There seems to be a delay in issuance of refunds. In fact, those who filed their ITRs in June-July are yet to receive refunds. Generally, tax refunds are issued in a period of 2-4 months," he added.

Aarti Raote, Partner, Deloitte said, "The general timeline for processing the tax refunds is 2-4 months but may vary based on the complexity of the tax returns. One observes that simple salaried tax returns where most of the income is reflected in the 26AS get processed swiftly and accurately. The taxpayers with smaller refunds (i.e. below 5- lakhs) get processed faster. However, tax returns where there is gain form property sale reflected, or where treaty relief is claimed, take time to get processed and at times the processing also is not accurate."

Refund processing:

The refund is usually processed within a month’s time of filing the ITR. After the processing of refund is completed by Centralised Processing Centre, the refunds are issued within 20 to 45 days. The refunds for taxpayers who are eligible for refunds up to Rs 5 lakh get direct bank credit within a week of refunds being processed.

However, a delay is also likely to occur if the taxpayer makes a mistake in filling the ITR. Refunds are withheld if a mismatch occurs in the ITR and the details available with the I-T department. In case of a query, the taxpayer must respond to it quickly. 

Another possible reason for the delay in issuance of income tax refunds is queries raised or clarifications asked by Centralized Processing Centre (CPC) of income tax department while processing the ITR, mismatch in ITR and Form 26AS, assessment proceedings initiated by tax authorities, certain claims made by the taxpayer in ITR which the CPC wants jurisdictional tax officer to verify etc.

In many cases, income tax refunds are not issued or are rejected due to simple mistakes like furnishing incorrect bank account details in the ITR form. In that case, check your bank account details you have mentioned in your ITR. You can also raise a refund re-issue request.

How to raise Income Tax refund Re-issue Request:

Step 1: Logon to ‘e-Filing’ Portal www.incometaxindiaefiling.gov.in
Step 2: Click on 'My Account' menu and click 'Service Request' link.
Step 3: Select the 'Request Type' as 'New Request' and Select the 'Request Category' as 'Refund Reissue'. 
Step 4: Click 'Submit'.Details such as PAN, Return Type, Assessment Year (A.Y), Acknowledgement No, Communication Reference Number, Reason for Refund Failure and Response are displayed.
Step 5: Click 'Submit' hyperlink located under 'Response'column. All the prevalidated bank accounts with status validated/validated and EVC enabled will be displayed.
Step 6: Select the bank account to which the tax refund is to be credited and click 'Continue'. Details such as Bank Account Number, IFSC, Bank Name and Account Type are displayed for the taxpayer to cross verify the same.

Note that if the taxpayer does not have any Prevalidated bank accounts, then the taxpayer is directed to Prevalidate bank account Screen. In this screen, the taxpayer should enter all relevant details of the bank account where he intends to receive refund and click on 'Prevalidate' button to proceed with the request submission. After this Account is pre-validated by the concerned bank, the bank account will be automatically considered for refund re-issue. This account will now be displayed under Pre-validated bank accounts in the e-Filing portal.

In case the prevalidation of account fails, then the same will be communicated to the taxpayer by CPC. The taxpayer is required to resubmit the request for refund re-issue/prevalidation of bank account.

Step 7: Click 'Ok' in popup if the details are correct and the options for e-Verification appears in the dialogue box. Choose the appropriate mode of e-Verification, Generate and enter Electronic Verification Code (EVC)/Aadhaar OTP as applicable to proceed with the request submission.

If Digital Signature Certificate (DSC) is registered in the profile, generate the signature file by downloading the 'DSC Management Utility' and upload the same to proceed with the submission.

Step 8: A success message will be displayed confirming the Refund Re-issue request submission

How to check status of submitted Refund Re-issue request:

• Logon to ‘e-Filing’ Portal www.incometaxindiaefiling.gov.in
• Go to the ‘My Account’ > Click ‘Service Request’ > Select the ‘Request Type’ as ‘View Request’ and select the ‘Request Category’ as ‘Refund Reissue’