How To Claim Income Tax Refund?

Income tax filings and returns can get complicated and sometimes one ends up paying tax at a higher rate than they are supposed to. The Indian Taxation law permits the assess to claim a refund for the excess tax paid to the government during the financial year. A tax refund applicable to employees could be termed as and falls under the following:

Tax Deduction at Source at a rate higher than the actual tax payable.

Under the current regime, the companies direct their employees to submit a proof of their tax returns & savings investment so that such savings and investment can be set off against the tax that is deducted.

As per the IT Act 1961, provisions relating to refund of taxes and any such refunds arise on an assessed satisfying to the assessing officer that the amount of tax paid by the assesse for any year exceeds the amount of tax payable by him are dealt with under section 23 and 247.

Procedure to claim a Tax Refund

The first step for any assesse to claim the refund under the Income Tax Act is filing form 30. Under ordinary circumstances, there is no necessity for filing any form and tax refund may be claimed during/while filing the Income tax returns. There is no tax applicable for refunds as the same is receipt of excess tax paid and not income earned.

It takes a period of 4 to 6 months from the date of filing the Income Tax returns to receive the refund. The claim of a refund shall be made within one year from the last date of the assessment year.

In case of a delay in filing for the refund due to any reason an application for condonation shall be filed before the tax authorities provided that any request for condonation shall not be applicable If the same is extended beyond six years.

Eligibility for Interest on the refund shall arise and is calculated at the rate of 0.5% per month and 6% per annum from the first day of assessment year until the date when the refund is paid to the assesse.

Your tax refund claims may be rejected if you have computed your taxes wrong.

Forgot to claim the refund?

As per the latest circular by CBDT dated 09.06.2015 it has been clarified that the rules regarding claim of the refund if the taxpayer hasn't claimed the same while filing the income tax return.

The claim of the refund has to be made using 'Form 30'. It has to be made within one year from the last day of the relevant assessment year i.e. the Assessment Year relating to the financial year for which the return is filed. The acceptance of claim depends on the claim amount and the judgement of the income tax commissioner.

Refund pending due to incorrect details

Sometimes it happens that one has filed their ITR with a refund claim but the refund has not been processed yet. This may be because of the following reasons:

The most likely event is that the department has computed your tax and found out that no refund is payable to you. In such an event, the Income Tax Department will issue a notice you under Section 143(1) specifying that your refund amount is NIL.

There also a possibility that the department has processed your refund but you have not received it because of to wrong bank details or cheque has not been received by you due to wrong address details. If the refund is pending because of incorrect bank details or address provided by you, you can request the bank to reissue the refund after providing the necessary details.