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5 reasons why your income tax refund gets delayed and how to handle it
February, 10th 2020

Income tax refund is received by the taxpayers when the taxes paid are higher than the actual tax liabilities. Taxpayers file their tax return claiming refund of income tax on account of excessive deduction of tax at source or payment of advance tax or self-assessment tax. Many a time such refund gets stuck. There could be various reasons for not getting the tax refund including inaccurate information uploads, incomplete filing, wrong bank transactions, among others.

(Also read: New vs old personal income tax slabs: Which is better for you? Check here )

Here are some of the possible reasons for not getting income tax refund and how to handle it:

Incorrect bank account details

There are chances that taxpayer did not give correct bank account number or other bank details while filing the income tax return (ITR). According to Gopal Bohra, Partner, NA Shah Associates, to avoid delay in getting the refund, taxpayer should properly check the bank account details before filling ITR.

“If the bank account is closed subsequently, taxpayer is required to update the bank account by login at income tax portal,” he said.

Need for additional documentation

One of the common reasons for not getting refunds is the need for additional documentation. "This may be required to support the claim or pending past demands or may be for operational issue," said Aarti Raote, Partner, Deloitte India.

Inadequate or fabricated information

There are chances that taxpayers have coded inadequate or fabricated information to avail benefit.

"In order to rectify the same, the taxpayers are required to provide complete and appropriate information which could reduce the chances of rejection or delay in the refund procedure," said Kuldeep Tomar, Director, Advisorymandi.

Mismatch in the TDS/TCS claimed

Sandeep Sehgal, director, tax and regulatory, Ashok Maheshwary & Associates LLP states, “The mismatch in TDS claimed in 26AS could be due to wrong filing of TDS return by the employer or TDS deductor (i.e. bank etc.) and taxpayer may need to approach them to correct their TDS return."

However, there are instances where even the records of the department do not reflect correct TDS. In such cases, taxpayer is supposed to file an online response by logging into income tax portal.

Refund request under process

The delay could be at 2 levels: the I-T department is taking time to process the request or the I-T department has already processed but there is a delay at the bank’s end, according to ClearTax.

How to handle the delay?

If for some reason, a taxpayer did not receive refund amount, ideally they should raise a service request on the e-filing portal.

"Always keep a check if there is any communication from the I-T department on the registered email id or e-filing account regarding the reason for not getting the refund. This is imperative as you cannot raise the refund re-issue request until the reason for rejection is reflected on the e-filing website," said Jashan Arora, Director, Master Capital Services.

"If there is no status update for more than 2 months, the taxpayer can submit their grievance through e-Nivaran form under their e-filing account. They could seek a resolution from CPR-ITR under the ‘processing’ in the grievance category,"

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