[TAXSCAN 360] ITR Filed? Know Complete Details on Income Tax Refund

With the current deadline for filing your Income Tax Returns ( ITR ) for the Assessment Year 2024-2025 on July 31st, it’s quite vital to know the various lawful tax deductions that could be attached while filing your ITR and how to claim IT refunds. And this would, in turn, save the assessee’s money. Most of the cases that are filed in the ITAT are either based on income tax deductions or additions.

What is an Income Tax refund?

An income tax refund can be defined as the sum initiated by the Income Tax Department when taxpayers overpay their taxes while completing an ITR for a specific assessment year. This overpayment can happen through various means, such as excessive deductions from salary (TDS), tax collected at source (TCS), advance tax payments, or self-assessment tax. While filing the ITR, we have to provide proof of the deductions claimed by us. The general trend is that, rather than individual taxpayers, corporations and firms are the ones who request deductions the most.

Once the ITR is e-verified by the assessee, the tax department begins the refund process. The assessing officer will go through the returns filed and verify the deductions claimed.

Essentials for claiming Income Tax Refunds

The essential conditions to be satisfied for availing IT returns are as follows:

1. You must have a functioning or active username and password for the system.
2. Your Permanent Account Number (PAN) should be officially linked with your Aadhar number.
3. You should have necessarily completed tax filing and submitted your ITR with a request for a refund.

Meeting the above-explained three conditions is essential to using the service effectively and processing the taxpayer’s refund request.

How to check the refund status?

Now we will be looking into the steps the taxpayer has to follow to check the refund status 

1. Access the e-filing portal homepage.
2.  Enter the user ID and password.
3. Navigate to the e-File section, then select Income Tax Returns, followed by Filed Returns Overview.
4. At this point, you’ll be able to review the status of your refund for the specific tax year you’re interested in.
5. For more information, select the “View Details” option. This will allow you to examine the complete timeline of your submitted income tax return.

 How long does it take to process an income tax refund?

 It typically takes around 4 weeks, averaging ninety days, following your e-verification of your return. When the tax department evaluates a person’s tax return, they consider all applicable deductions and exemptions. If the calculations show that the individual has paid more than their actual tax liability, the excess amount is returned to the taxpayer as a refund. Generally, it takes around 4 to 5 weeks for the refund amount to be credited to the taxpayer’s account.

Suppose the refund arrives after the expected time frame, in that case, the taxpayer should review their tax return for any potential errors or inconsistencies and check their registered email account for messages from the Income Tax Department. Look for any notifications about issues with their tax return or refund status, and verify if the tax authorities have identified any discrepancies in the submitted information. These steps can help the taxpayer clarify why the refund has been delayed and what steps the taxpayer needs to take to resolve the situation.

The income tax authorities initiate this refund process after thoroughly assessing the taxpayer’s financial information and ensuring that the claimed deductions and exemptions are valid. In a simplified way, we can say that ITR refunds are the central government’s way of returning money that was overpaid in taxes during the year.

Why Your Income Tax Refund Might not be Deposited as Expected?

There are certain situations where the refund that has been scheduled to be paid by the IT department fails to be credited to the taxpayer account, and the reasons are explained as follows:

1. It is mandatory for the taxpayer to pre-validate their bank account; if not, then the taxpayer might not get the refund
2. The name on the bank account and the PAN card information do not match.
3.  If the IFSC code is not valid.
4.  If the account you listed in your ITR has been closed.

Income tax refunds serve as a framework to return overpaid taxes to taxpayers. The Income Tax Department begins this procedure after carefully reviewing a taxpayer’s tax return and confirming any claimed exemptions and deductions. By prohibiting citizens from paying more in taxes than they owe, the refund system guarantees tax equity and ensures fairness.

To receive a refund, taxpayers must meet certain conditions, such as having an active account, linking their PAN with Aadhaar, and filing their returns correctly. The refund process typically takes 4-5 weeks, but delays can occur due to various factors, including errors in the tax return or issues with the taxpayer’s bank account information. It’s important for taxpayers to know about major issues that might prevent their refund from being deposited, such as unvalidated bank accounts or mismatched personal information.

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