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January 21, 2021

Checklist if you have not received refund under Income Tax

by CA Shivam Jaiswal in Income Tax

Checklist if you have not received refund under Income Tax

Income tax refund is a process by which the Income Tax Department returns any excess tax paid by a taxpayer during a particular financial year (FY). This happens when the amount of tax paid by a taxpayer is more than his/her actual tax liability for that particular FY. The excess tax can be claimed as an income tax refund under Section 237 of the Income Tax Act, 1961. The amount of income tax refund claimed by a taxpayer by filing ITR is subject to verification by the Income Tax Department.

However, such refund can be withheld by the Department in certain cases. These provisions are covered under Section 241A of the Income-tax Act. According to Section 241A, where refund of any amount becomes due to the assessee under the provisions of section 143(1) and the Assessing Officer is of the opinion, having regard to the fact that a notice has been issued under section 143(2) in respect of such return, that the grant of the refund is likely to adversely affect the revenue, he may, for reasons to be recorded in writing and with the previous approval of the Principal Commissioner or Commissioner, as the case may be, withhold the refund up to the date on which the assessment is made.

Given below is the areas one can look into if they have not received refund under income tax

Check if ITR is verified

After having successfully filed your income tax return, the next step is to verify it. The Income Tax Department starts processing your return, once it is verified.

Your return can be verified electronically through any of the following means:

  • Via net banking
  • Via Aadhaar OTP
  • Via EVC on the Income Tax Department website

It is important to remember that refunds, if any, are processed for returns that have been submitted and verified. So before applying for a refund please ensure that your returns are properly verified.

Check if bank accounts are correctly mentioned

From AY 2015-16, it has become mandatory for the taxpayers to provide the details of all the bank accounts held by them in India including the accounts with joint names.  

Bank statements are statements which detail the transactions in the bank account of an individual or organization. They must be accurate and clear in order to be authentic and valuable. If any assessee has provided incorrect bank details, they will not be able to receive their income tax refund.

Also, to claim your income tax refund, then apart from filing income tax return (ITR), you might have to do one more additional step. You will have to make sure that you have pre-validated your bank account in which you wish to receive the income tax refund once your tax-return is successfully filed or when filing your ITR.

Apart from pre-validating your bank account, you are also required to link your PAN with your bank account as well. If your PAN is not linked with the bank account, then you will not be able to get the income tax refund in your bank account.

Check if CPC has processed the refund

The Income Tax Department processes the income tax return only after they are filed and successfully verified by the taxpayer. Finance Act, 2008 empowered the Central Board of Direct Taxes (CBDT) to make a scheme for centralized processing of returns with a view to expeditiously determining the tax payable by, or the refund due to the taxpayers.

Based on the recommendations of the Technical Advisory Group, the department adopted the strategy that Central Processing Center (CPC) at Bangalore would process paper and e-returns without any interface with taxpayers and in a jurisdiction free manner. 

The taxpayer has to verify the return by sending the ITR-V (Acknowledgement) within 120 days from the date of filing the return. ITR-V will be physically sent to the CPC. Once they receive it, CPC will send an acknowledgement on the registered email ID of the taxpayer.

CPC processes each e-filed return and generates intimation u/s 143(1). The department compares the data provided in the return by the taxpayer in addition to the records available with the CPC and generates an intimation under section 143(1). The intimation also carries the detailed calculation of the tax as computed by the taxpayers and the income tax department. If the return filed by the taxpayer is found to be accurate and has a refund claim, the refund is issued to the taxpayers.

So, if you have not received your refund, check whether CPC has processed the same or not

Raise grievance if CPC has not processed the refund

After the taxpayer has filed their income tax returns and verified it successfully, the status of the income tax returns form should reflect as “Return submitted and Verified”. However, after waiting for a considerable period, if the taxpayer does not receive any intimation notice and their ITR remains not processed by the Income Tax Department, then the taxpayer could raise the grievance for ITR not processed. To raise grievances for ITR, taxpayers may follow the following steps:

  • Step 1: Go to the income tax e-filing portal. Sign in to your account.
  • Step 2: At the income tax e-filing portal, go to the “e-Nivaran” tab and click on “Submit Grievance” option.
  • Step 3: Once you hit “Submit Grievance”, your personal details will get auto-populated on the screen.
  • Step 4: Choose the options given and then fill the details of the grievance. Inside the box for Grievance Description, you should mention your grievance details. You can also upload documents to support your claim.
  • Step 5: After filling all the details, click on the “Preview and Submit” button. A new page will appear on your screen. Verify all the information that you have entered in support of the grievance and then, make the final submission by clicking on “Submit”.
  • Step 6: After you click on the “Submit” button, the grievance will be sent to the Income Tax Department. You will see a Grievance Id appear on the page. Make a note of this ID for future references. The intimation notice will be emailed on the registered email address. You will also find a link on the screen which will give you the option of downloading the grievance.

Check if any past demand is adjusted

Taxpayer’s generally concentrate on the year for which they are filing the ITR. But income tax department does not work like this. The department checks the overall record till date. If there is any amount that is due from our side then it carried forward in coming years till it is cleared. The due amount is adjusted in the refunds as per section 245 of the Income Tax Act, 1961

One has to check whether your refund claim has been adjusted by any past demand. So, if you have a tax refund claim of, say, Rs 75,000, and there is an outstanding tax due of Rs 20,000 from previous assessment year, the tax department will adjust the Rs 20,000 from the Rs 75,000 and refund Rs 55,000 to the taxpayer.

The Income-Tax Department uses the registered contact details (Mobile number & E-mail ID) for all communications related to e-Filing. It is mandatory that all tax payers must have a valid contact details registered in e-Filing portal. Many registered users are not having authenticated contact details in eFiling or may have provided details of other persons for convenience. This prevents the Department from interacting directly with taxpayers on their personal email and Mobile.

Hence, it is requested that all the e-Filing users may immediately update and authenticate their correct contact details so that the communication can be sent to the valid Mobile number and E-mail ID.

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