The feeling of getting back something that you had written off can be exhilarating, especially when it happens to be your hard-earned money. Tax-payers get that opportunity every year in the form of tax refunds. Yet, it is not such a pleasant experience for many, due to the delays, mistakes and their perception of the process being tedious. However, this view is unfounded as the tax refund process has become simpler and more efficient over the years.Here’s a guide to things that you must know about tax refunds to ensure a hassle-free process.
Circumstances for tax refundYou are entitled to a tax refund from the income tax department if you have paid tax in excess of what was due. In case of salaried individuals, a refund claim typically arises when they inadvertently overstate their taxable income by not disclosing all tax-saving measures taken by them in their investment declaration to their employers, leading to a higher tax liability. For example, failing to mention investment in NPS or health insurance premium paid by them. In addition, since most organisations do not accommodate deductions on donations made under section 80G in their investment declarations, these have to claimed at the time of filing returns, resulting in a probable refund.
Early bird gets early refundMany tax-payers tend to postpone filing their tax returns until the last minute. Not only can this approach create complications later, but also delay the process of refund due, if any. If you have chosen the option to send your form ITR-V to I-T department’s central processing centre in Bangalore, make sure you send it immediately after filing your returns online instead of waiting until 120 days, the period allowed for receiving the form. Moreover, if you file your returns after the due date or do not dispatch the ITR-V on time, you stand to make a small financial loss, as the income tax department will pay the interest only from the date of the belated return being filed.
Go paperless for faster refundsYou can eliminate the delay in refund resulting from procrastinating on posting your ITR-V by simply taking the e-verification route. Introduced last assessment year, the mode allows you to complete the process using netbanking or AADHAAR, without having to contend with any documentation later. This assessment year, many tax-payers who have chosen to verify their returns electronically have received their refunds in their bank account within a month of filing the return.Avoid mistakes for smooth refundsThe income tax department effects refunds either by directly crediting it to your bank account or by issuing a refund cheque. Therefore, make sure you enter the correct account number and IFSC code in your tax return forms. In case if you opt forcheques (paper) mode of refund, you need to ensure that you have mentioned the correct residential address.
Check statusOnce you file your returns, you can keep a track of your refund’s status by accessing the link (created for the purpose. You need to enter your PAN and assessment year to get the status. This will be the key to taking further action, if required. It could either be in process, already credited or the assessing authorities may have decided that you are not eligible for a refund. If your mistakes like entering wrong bank account number are cause of the delay, you can log on to incometaxindiaefiling.gov.in to carry out the changes and raise a refund re-issue request.
Resolving complaints and disputesIn case of any disputes or queries regarding your refund claim, you can contact the tax department on toll-free number 1800-425-2229 or 080-43456700 for clarifications. In case of issues related to payment of the amount, you can get in touch with the State Bank of India, the banker in charge of issuing refunds, through its toll-free number 1800-425-9760.
This article was first published on H&R Block India