How to Check Income Tax Refund Status

Introduction

At times, individuals end up paying more taxes than they are supposed to. It can happen because of an error in income tax calculation or tax deducted at source. In such situations, you can claim an income tax refund. Keep scrolling till the end to learn more about income tax refunds in India. 

What is Income Tax Refund?

When you pay more taxes than you were originally required to, you are entitled to an income tax refund. The refund will include the excess amount that you have paid, like advance tax, TCS, and TDS. The income tax department will calculate your taxes and verify your refund claim before processing it. 

Once your refund request gets approved, the amount can reach you in two ways. It will get directly credited to your bank account, or a cheque will be issued. 

●    Direct Credit of Income Tax Refund: The refund can be sent to you via RTGS or NECS. You must enter your bank information correctly for a direct refund. You will have to enter specifics like your bank account number, communication address, and your bank's IFSC code. It is an easy and simplified method of an income tax refund. 

●    Income Tax Refund Via Cheque: Sometimes your bank account information might be inaccurate or unclear. In that case, you will get the refund via a check to your bank account. 
 

How to Check your ITR Refund Status

You can check income tax refund status through the NSDL website or on the income tax e-filing portal. 

NSDL Website

The steps to check the status of the income tax refund on the NSDL website are as follows:

●    Visit incometaxindiaefiling.gov.in/home.
●    You will have to log in with your User ID, which is your PAN number, password, and captcha code. 
●    Proceed to the View Returns/ Forms tab.
●    Search for "Select an Option" and click on "Income tax returns" in the drop-down menu.
●    Enter the assessment year and hit submit. 
●    Hit the relevant ITR acknowledgment number to track your ITR refund status. 

Income Tax E-Filing Website

If you are wondering how to check income tax refund status, you should follow these steps:

●    Visit tin.tin.nsdl.com/oltas/refundstatuslogin.html.
●    Specify your PAN details, assessment year, and the captcha code.
●    Hit submit to check your ITR refund status. 
 

Calculation of Income Tax Refund

While filing your income tax returns, you can calculate your income tax refund after considering deductions and exemptions. The formula for calculating the income tax refund is as follows:

Income tax refund= Total tax paid in a year - Total tax payable for the year

The total tax paid annually can include advance taxes, TCS, TDS, and self-assessment tax. If it is more than your original tax liability, you will be able to claim an ITR refund. You can use an income tax refund calculator for accurate calculations. 

A tax refund example is as follows:

How is Income Tax Refund Processed?

The processing of an income tax refund is relatively simple. Refund processing will begin after you file your returns and verify them either electronically or by uploading a physical copy of the ITR-V acknowledgment. The CPC will check the taxes, decide whether the tax paid exceeds the tax liability, and start processing the refund. Once the refund is processed and generated, it gets credited to your bank account automatically.

Eligibility for ITR Refund

If the taxes you paid during a fiscal year exceed your actual tax liability, you may be eligible for an income tax refund from the IRS. Some of the reasons why a taxpayer may have paid too much tax include the following:

●    The amount of advance tax paid based on self-assessment is greater than the actual tax liability.
●    The employer's Tax Deducted at Source (TDS) deduction exceeds the tax liability.
●    Tax calculation error also results in a higher tax payout than the actual tax payable.
●    Income earned abroad is taxed twice.

To receive a refund for the excess tax paid, you must file your ITR accurately and have it verified.
 

How to Claim Income Tax Refund

The procedure for claiming a refund of tax is pretty simple. All you need to do is file your ITR. If you file your taxes accurately and get it verified, you can claim the refund with ease. Use a tax refund calculator to determine the refund amount that you are eligible for. 

What are the Different Types of Income Tax Refund Statuses?

What to Do If Refund is Not Processed?

You will usually get your refund within 20 to 45 days of filing the income tax return. But if you don't receive it, you should check your income tax refund status online. Depending on what it says, you need to take the right initiative.  

Interest in Delayed Income Tax Refund

If there's any delay in your income tax refund, you are eligible for interest on it. If the total amount of refund is equal to or greater than 10% of the tax payment made, the government is obligated to pay interest on the refund. As long as you file returns by the due date, the IT department will pay 0.5% interest from April 1st to the date the refund is granted. However, no interest will be paid if the total amount of the refund is less than 10% of the tax.

Setting-Off Outstanding Taxes against Refunds

In some cases, you may notice that your income tax refund is less than what you claimed. In case you have an outstanding income tax from another year, the income tax department may adjust it against your claim.

However, keep in mind that the IT department is required by Section 245 of the Income Tax Act to notify you of this. This claim must be accepted or rejected within 30 days. If you do not respond, the IT Department has the authority to proceed.
 

Conclusion

People in India are eligible for income tax refunds for paying more than the required amount. If you face any issues with tax refunds, you can contact the customer support team. Keep checking your income tax refund status and wait for it to reflect in your account.