Is Your Income Tax Refund Stuck?

“CBDT issues refund of over ₹ 49,696 crores to more than 22.75 lakhs taxpayers between 1st April 2021 to 16th August 2021”, said the tax department on its twitter handle

What is the concept of refund? Are you that taxpayer, eligible for refund? Has the refund not reflected in your bank account yet? How can you reapply and have your refund released? 

Here are the answers to the many questions on Income Tax refund and the related issues

What is Income tax refund?

If a taxpayer has paid taxes more than his tax liability, the excess amount of tax paid can be claimed from the tax department by way of Income Tax Refund. Such circumstances are: 

  1. Excess deduction of tax at source from salaries, dividend, interest etc.
  2. Excess payment of advance tax.
  3. Tax paid on self-assessment reduced on revision, rectification etc.

Where can I find the refund on my tax return?

The taxpayer can find the amount of refund under “Computation of Tax liability on Total Income” section. It appears in Part B or Part D depending on the type of return applicable to you

What does the refund process involve?

  • The refund process begins only after an intimation under Section 143(1) stating the refund due is generated by the tax department. 
  • Such intimation should be sent within nine months from the end of the financial year in which the return is filed
  • For instance, if the returns for FY 20-21 is filed on 31st July 2021 (i.e. FY 21-22), the intimation u/s 143(1) should be received within 31st December 2022. 
  • Generally, the refund is credited to the bank account or the cheque of refund is issued within 30-45 days from the date of issuance of such intimation.

Reasons why refunds are stuck

  • Delay in submission of ITR-V or delay in E-verification of ITR filed
    • The tax department would not process the ITR until and unless it is E-verified or the physical form has been submitted to the CPC. 
    • A delay in e-verification or submission of ITR would lead to delay in processing of ITR and this would further delay the issuance of refund.
  • Problem with Bank Account details
    • With the Pre-validation of Bank accounts being mandatory, the bank account details would be accurate. 
    • If the pre-validated account is closed before you’ve received the refund, the amount shall be stuck with the department
  • Incorrect Address
    • ECS has reduced to a greater extent the refund failures resulting from the non-delivery of cheques due to incorrect address. 
    • However, the problem continues in the cases where the taxpayers opt for refund through the mode of cheque.
  • Additional Documentation
    • The Assessing officer may call for additional information and documentation. 
    • Only on submission of the required documents & information, ITR would be processed and refund would be issued
  • Mismatch in TDS
    • Mismatch in TDS data as per 26AS at the time of filing of returns by the taxpayer and processing of such returns by the AO, would delay the processing of ITR and the issuance of refund.

How to re-apply for tax refund?

  • In case the refund status shows “Refund has been credited”, but your account has not received any credit, contact your banker or mail to the refund banker SBI at or call on SBI toll free number: 18004259760. 
  • In case the refund is unpaid due to change in bank details, furnish the correct bank details on the income tax portal, then raise the refund re-issue request.
  • In case the refund cheque has been undelivered due to incorrect address, furnish the correct address on the income tax portal, then raise the refund re-issue request.    
  • The refund reissue request can be placed on the Income tax portal by following these simple steps
    • Step 1: Login to Income Tax Portal  
    • Step 2: Click on the tab “Services”
    • Step 3: Select the option “Refund Reissue”
    • Step 4: Select the return
    • Step 5: Select the Bank Account
    • Step 6: Select the method of verification. 
    • Step 7: Verify
    • Step 8: Submission of Request.

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