Indian taxpayers are expected to file an income tax return or ITR with the Income Tax Department of India after the completion of a financial year. For the Financial Year 2021-22 ending on March 31st, a record total of 72.42 lakh ITRs were filed on July 31st, the last day of submission1.
The ITR delineates the income details of an individual and the various sources of income that may be taxed as per prevalent tax laws. Tax deductions and exemptions that one is eligible for are also mentioned in the ITR. Paying the yearly premium of your life insurance policy, for instance, can help you to claim a deduction of up to Rs 1.5 lakhs under section 80C of the Income Tax Act, 1961 subject to provisions stated therein.
At times, there may be a chance that your actual tax liability may be lower than the taxes you already paid. In such a scenario, the taxpayer can claim a refund of the excess income tax paid. Though it usually takes a few weeks to receive back the excess money paid as tax, the time frame may sometimes differ, depending on different factors.
Therefore, it is essential that you know where you can check the refund status of your income tax return.
What is a tax refund?
A tax refund is the amount received by an individual when their taxes paid exceed their tax liability in a financial year. The calculations involve analysing the individual’s sources of income and the taxation norms prescribed by the government.
For instance, your employer may have assessed and deducted a higher amount of Tax Deducted at Source (TDS) which exceeded the limit you are liable for. The tax refund process is, then, an effective way to ensure that you, as an honest taxpayer, receive back the surplus amount paid on account of tax, and that you only have to pay what you owe and nothing extra.
The process of claiming the refund on your income tax is simple and can be carried out digitally.
How can you check the status of your refund?
After you have filed a claim for a refund on income tax through the Income Tax returns, the tax department completes the assessment of Income Tax Return filed and issues income tax refund.
There are two ways you can check the status of your tax refund:
- Via the tax e-filing website/portal, or
- Via the NSDL website.
If you are using an e-filing portal, here are the steps you have to follow:
- Log into your account on the portal
- Click on the ‘e-File’ option
- From the dropdown menu, click on the ‘View Filed Returns’ option
- You will see your current ITR files, as well as previously filed ITRs on the page, from which you must select the ‘View details’ option for the ITR against which refund is expected.
- The refund status will be visible to you now.
If you are using the NSDL portal, then you must follow these steps:
- Visit the NSDL website after running a search for ‘check refund status’
- Add the PAN details that the page will ask for, along with the year and the captcha
- After this is submitted, you will be directed to a page that shows you the status of the refund on income tax.
In case you are new to the process, here’s a short explanation of what each kind of refund status means:
- Refund issued - The refund has been issued by the department. You should check your bank account for the refund credit.
- No demand no refund - This means that you are not eligible for any refund; however, there is no requirement for further tax payment either as tax liability and tax paid amounts are matching.
- Failure in refund - The refund on income tax has been initiated by the department; however, it has not been credited due to either discrepancies in the bank account details you provided, among the other reasons.
- Refund determined - The department has not processed your ITR yet, which means assessment of ITR filed is not yet completed.
- Demand determined - You may have to pay some additional tax.
- Rectification processed, return due - The department has accepted your request and the refund amount has been recalculated and is on the way to your bank account.
- Rectification processed, no demand no refund - The department has processed your rectified income tax return and you are not eligible for a refund nor liable to pay any tax.
- Rectification processed, demand determined - Your rectification request has been processed and you have been deemed liable to pay additional tax.
How Can You Proceed If Your Refund Is Not Processed?
Ideally, the refund process should be completed in a matter of 20 to 45 days after completing assessment of income. However, if this has not occurred, then you may have to take some action from your end.
You may, keep checking the e-filing portal or NSDL website to know the updated status. You can also raise grievance on Income Tax e-filing portal under category “Refund related”. If you experience a long delay, you can reach out to the jurisdictional assessing officer regarding the issue.
Hence, as a precautionary measure, you must file your ITR correctly. Ensure that all your sources of income are mentioned correctly. Gains accrued from various investment avenues like market-linked insurance policy (ULIP), should also be mentioned properly.
Additionally, ensure to be updated with the dates for the submission of the ITR. Do note that tax laws are subject to changes. Consult a tax expert for more details.