If a taxpayer has paid excess tax in any assessment year, they are entitled to get a refund of the extra amount under Section 237 of the Income Tax Act. The claim for refund was made in Income Tax Form 30 until August 31, 2019, and verified in the prescribed manner. However, with the advent of e-transfer of refunds, it can now be claimed by simply filing the ITR. The ITR should further be verified, either physically or electronically, within 120 days of filing. Moreover, the excess tax for which a refund is claimed should be reflected in Form 26AS. The refund is subject to verification by the Income Tax Department. It is credited only if the refund claim is found to be valid by the department. If approved, it will be refunded to you by crediting it to your bank account through ECS (electronic clearing service) transfer.
Who can claim an excess income tax refund?
Individuals can claim the income tax refund if:
– The advance tax is more than the actual tax liability.
– The amount of the self-assessment tax exceeds the amount of tax due.
– Your tax liability is less than the amount of taxes withheld at the source from your income, dividends, interest on securities, etc.
– Investments that are eligible for tax deductions on your net taxable income have not yet been disclosed or have not yet been declared.
Tax treatment of income tax refund
The amount of the income tax refund is equal to the excess tax paid, which is not taxable and cannot be considered income. The interest earned on the excess income tax refund, however, is taxable under the “Income from Other Sources” head and is subject to income tax according to the assessee’s applicable tax slab.
How to claim an income tax refund?
Here’s how you can claim your income tax refund:
– File the ITR of that year before the deadline ends.
– You can file your ITR online. You must provide information about your investments that are eligible for deductions.
– Once you have filled in all your details, the system will calculate the tax liability and refund due if applicable.
– If the claim is accepted by the Income Tax Department, they will pay the refund.
How to track your income tax refund
– Visit the official e-filing website and select the ITR status button. Then you need to provide the PAN card and the acknowledgement number.
or
– You can visit the NSDL website, navigate the refund status login page, and provide the PAN card and assessment year details.
