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Income Tax Refund Status

The prevailing tax system in India is quite easy to understand, but some of the processes and details it entails can be difficult to understand sometimes. Here is an article that explains one of Income Tax’s trickier aspects – Income Tax Refund Status.

There are two types of taxes in India that are paid by both salaried and non-salaried individuals.

As the name suggests, the tax that is levied on the taxpayer directly is known as Direct Tax. For example – income tax, wealth tax, etc. Indirect taxes refer to the involvement and taxes paid by third parties like restaurants, various dealers, etc. For example – Service tax, VAT (Value Added Tax), GST (Goods and Services Tax), etc.

What is Income Tax Refund?

The Income Tax imposed by the Government of India is a Direct Tax, as mentioned above, and is its primary source of revenue. Income Tax refers to the tax paid by all those individuals who receive a steady salary on a routine basis.

It is collected by the Income Tax Department, which is regulated and managed by the Government of India. It is accumulated from different working organizations and individuals, agricultural income being the only exception 

Only the salary of an individual does not contribute to income tax. Other sources include dividends, securities’ interests, and lottery winnings, fees accepted from /paid for professional services, capital gains, rent payment, insurance, royalty payment, or any other source of profit like the above.

Income Tax Refund refers to reimbursement of the excess tax amount, which is paid to the Income Tax Department, to the taxpayer. It is regarded as a proof of payment of appropriate taxes and of an individual’s income details and the tax paid by him/her in accordance with that income.

Types of Income Tax Returns

Income Tax Refund can be categorized into two types, which are as follows:

ITR – Income Tax Return

Income Tax Return, also known as ITR, is basically a form related to Income Tax paid by a taxpayer, in which the taxpayer files his/her income and tax paid information. 

All regularly earning citizens of India are mandatorily required to file ITR on an annual basis. Individuals that do not fall under the Income Tax slab as defined by the ITD (Income Tax Department) are not required to file ITR. 

TDS – Tax Deduction at Source

Tax Deduction at Source refers to a means of accumulating tax levied on dividends, income, assets, sales, etc. This is done by requiring the taxpayer or a legal intermediary to deduct the tax to be paid before paying it to the payee, as in the Income-tax Department.

In India, the deduction of tax at the source is allowed by the Income Tax Act, 1961.

Filling ITR/TDS gives an assurance to the taxpayer that he/she is able to get a reimbursement if, by any chance, the tax paid is more than what was agreed. The Income Tax and its refund are defined by the Income Tax Act, 1961.

Currently, any individual whose total income is more than INR 2.5 Lakhs is required to file an ITR. The upper-income limit set for senior citizens who are between the ages of 60 years and 80 years is INR 3 Lakhs, while those who are above the age of 80 years is INR 5 Lakhs, for filing ITR.

Types of Income Tax Refund Forms

The different types of Income Tax Refund or ITR forms are mentioned below:

  1. ITR 1

    This is the most basic ITR form and is also known as SAHAJ. It deals with different Pension Income, Salary Income, Property or House Income, etc.

  2. ITR 2

    This form is applicable for those who earn additional income, apart from their business or professional gains. This is specifically designed for HUFs that is Hindu Undivided Families.

  3. ITR 3

    This form is the antonym of ITR 2, as in this for is for HUFs but is related to income that is earned from business or professional gains.

  4. ITR 4

    This is exactly like ITR 3, the only exception being the income, which is earned from professional or business proprietorship

  5. ITR 4S 

    This form is specifically designed for those who prefer the taxation scheme as laid out by Section 44ADA, 44AD or 44AE of Income Tax Act, 1961. This is also known as SUGAM.

  6. ITR 5

    This form is uniquely designed for various entities like firms or LLPs (Limited Liability Partnerships) or BOIs (Body of Individuals) or AOPs (Association of Persons) or Co-operative Societies or Local Authorities, etc.

  7. ITR 6

    This is for organizations and companies that are not eligible to claim Tax Exemption or Deduction as laid out by Section 11 of Income Tax Act, 1961.

  8. ITR 7

    This form is for those who file ITR claims under provisions as laid out by Section 139 (4A), 139 (4B), 139 (4C), and 139 (4D).

  9. ITR V

    This form is used for acknowledgement or verification and is received after an individual has filed his/her ITR.

What are the Eligibility Criteria for Income Tax Refund?

The various cases where a taxpayer is eligible for an Income Tax Refund are as follows:

  • The amount of Self-Assessment Tax paid in advance is more than the amount of tax the taxpayer is liable to pay, according to regular assessment
  • TDS from interest on dividends, debentures, securities, lottery winnings, bonus salary, etc. is greater than the tax payable according to regular assessment
  • In case a taxpayer is taxed in some country other than India, who has a Double Taxation Agreement with India, after paying the same tax in India
  • Error in the regularly assessed tax payable by a taxpayer, which is more than the actual amount of tax payable
  • Negative Tax payable; considering the tax deductions and the taxes paid
  • Undeclared Tax Saving Investments that offer tax deductions and exemptions as laid out by the Income Tax Act, 1961

Claim Process for Income Tax Return

The process for raising an ITR Refund claim is quite easy and simple to understand and also the whole process online. If an individual wants to claim the refund during a certain Fiscal Year, then he/she has to raise an ITR claim while filling the ITR for that year. 

The last date for filing an ITR is the 31st of July of each Fiscal Year.

To raise an ITR claim, one has to follow the steps mentioned below:

Step 1: Go to the e-filling website of Income Tax Department

Step 2: Fill in the applicable ITR form(s)

Step 3: After filling in the details, click on “Validate”

Step 4: Once the form is validated, click on “Submit”

Types of Income Tax Return Status

The different types of Income Tax Return Status are as follows:

  1. Expired 

    This status is applicable for those who opted for receiving their refund through paper cheque and were not able to encash the same within 30 days from Date of Issue.

  2. Paid

    This status means that the Income Tax Refund has been credited or transferred to the taxpayer or the taxpayer’s registered bank account respectively.

  3. Failed

    This status shows that the details provided by the taxpayer applying for the refund was inaccurate and the refund process has failed.

  4. Not Determined

    It means that the application for ITR has not been processed yet.

  5. Returned

    This status refers to the situation where the paper cheque has been returned to the Income Tax Department.

  6. Encashed

    This means that the cheque sent by ITD to the taxpayer has been encashed.

  7. Received

    This status means that the refund amount has been credited to the registered bank account of the taxpayer.

  8. Adjusted

    This means that the refund amount has been adjusted in accordance with the outstanding ITR from the previous assessment year.

Procedure to Check Income Tax Refund Status

Back in the old days, one had to go to the State Office of the Income Tax Department to check on their ITR Refund Status, which was tiresome. But, after the invention of the internet, this whole process has become online.

In general, there are two ways by which one can check his/her Income Tax Status online, by visiting either the website of the Income Tax Department or the Tax Information Network National Securities Depository Limited (TIN NSDL). The steps that are required to be followed to check the Income Tax status are mentioned below:

  1. Income Tax Website

    One of the online provisions to check the ITR Refund Status is offered by the Income Tax Department of India (ITD). This can be done by visiting their official website for e-filling, which is www.incometaxindiaefilling.gov.in.

    One can check the status of the refund process after a minimum of 10 days after submitting the ITR form. The various details that are required to be shared while requesting an ITR Refund Status are Name, PAN (Permanent Account Number) Number, Address, etc. of the taxpayer.

    One is also required to complete the e-filling process in order to check their status through the ITD e-filling website. 

    The steps that are required to be followed are as follows:

    Step 1: The browser on the device (desktop, laptop, smartphone, and tablet) that you are using

    Step 2: Type www.incometaxindiaefilling.gov.in and press enter

    Step 3: In case you have not yet completed the e-filling process, you are required to do so in order to proceed, completing which your account will be created, and you will receive your Login credentials. In case you have already completed that process, you are requested to skip this step

    Step 4: Click on the “Login” option and enter all applicable details such as Username, Password, PAN, DOB (Date of Birth) or DOI (Date of Incorporation), Security Code or Captcha Code

    Step 6: You will be redirected to your account page

    Step 7: Go to the drop-down menu and select the “Income Tax return” option

    Step 8: Select the corresponding year of assessment for which you want to know the ITR Refund status

    Step 9: Select the appropriate Acknowledgement Number, as referred to in the hyperlink

    Step 10: After pressing “Enter,” a pop-up window will appear on the screen which will display all the necessary details regarding the tax filing and ITR Refund

    Step 11: Details like date of tax filing, date of verification of tax filing, date of issue of ITR, date of completion of the process, etc. will be displayed on this pop-up window

    Step 12: For further details, click on the “More Details” at the bottom of the pop-up window after scrolling down

    Step 13: Year of Assessment, Mode of payment, Reason of failure of ITR Refund (if any or applicable), and other details regarding ITR Refund Status are displayed here

  2. TIN NSDL Website

    Another online facility to track the ITR Refund Status is provided by the Tax Information Network introduced and governed by the National Securities Depository Limited, on behalf of the ITD. The Tax Information Network (TIN) acts as the repository and a database for tax-related information of all the citizens of India. The official website for TIN NSDL is www.tin.tin.nsdl.com. 

    The only prerequisite, in this case, is that the ITR Refund must have been processed by the IT Department for the taxpayer to check its status. This process usually takes about 8-12 days to get completed.

    This method is exactly like the Income Tax e-filling website, as this too asks for various details such as Name, Address, PAN Number, etc.

    The steps that are required to complete this method are mentioned below:

    Step 1: Open the browser on the device (desktop, tablet, laptop, smartphone) you are using

    Step 2: Type www.tin.tin.nsdl.com and press enter

    Step 3: In case you have not yet registered yourself on the Tax Information Network, you can do so by clicking on the “New User” or “Sign Up” option. After providing all the required details, you will receive your Log In credentials via email or phone message or both

    Step 4: In case you have registered yourself, Log In using your Username, PAN, DOB or DOI and Password

    Step 5: At the “Income Tax Refund Status” section, fill in your PAN Number

    Step 6: Select the corresponding Year of Assessment for which you want to track the ITR Refund Status

    Step 7: After filling in the details, you will be asked to enter a Security or Captcha code to verify that you are not a robot

    Step 8: Click on the “Submit” option

    Step 9: A new pop-up window will materialize on your screen that will contain all the details regarding your ITR Refund

    There are also two ways to check Income Tax Return Status based on the availability of Login of credentials, that is if the user has registered himself/herself on the website or not. These ways are mentioned below:

  3. Checking Income Tax refund Status without Login Credentials

    This method is applicable to those who do not have Login Credentials. This means that they have not yet completed the e-registration at the Income Tax e-filling website or registered themselves under the Tax Information Network at the TIN NSDL website.

    By following this method, one can check his/her Income Tax Return Status without having to register themselves on the said websites.

    This method is only applicable for the Income Tax e-filling website as one cannot get his/her ITR Status via the TIN NSDL website without registering first.

    The steps are as follows:

    Step 1: Open the browser on the device that you are using

    Step 2: Go to the Income Tax e-filling website, which is www.incometaxindiaefilling.gov.in

    Step 3: Navigate to the “Income Tax Refund Status” on the left side of the screen and click on it

    Step 4: You will be redirected to another page where you will be asked to submit the following details:

    Name, Permanent Account Number, Acknowledgement Number, and Security or Captcha Code

    Step 5: After clicking “Enter,” a new pop-up window will be displayed on the screen which will contain various details regarding the ITR Status

    Step 6: The only con of this method is that you will not be able to view your previous Income Tax Refunds and its queries. You will only get the details of your current ITR claim

  4. Checking Income Tax Refund Status with Login Credentials

    This method is applicable for those who have registered themselves on the Tax Information Network or have completed the e-filling process at the Income Tax Department website.

    This method involves the same steps as mentioned above in the ITD e-filling website and TIN NSDL website section.

    One just needs to log in to his/her account, and on the dashboard, click on “View Income Tax Return Status/Forms,” select the corresponding Year of Assessment, and press “Enter.”

Modes of Income Tax Refunds

There are two different means of a tax refund. These are as follows:

  1. RTGS/NECS

    RTGS stands for Real-Time Gross Settlement while NECS is short for National Electronic Clearing Service. These two are the direct means for crediting or refunding the excess amount by transferring the said amount to the taxpayer’s bank account directly.

    These methods require some of the bank account details of the taxpayer such as Name, Address, Bank Account Number (minimum ten-digit number), and MICR (Magnetic Ink Character Recognition)/IFSC (Indian Financial System Code) of the branch office where the account resides

  2. Paper Cheque

    This is the indirect means of refunding the excess tax amount, which involves reimbursement in the form of paper cheques. This requires the Name, Address, and the Bank Account Number of the taxpayer.

Documents that are required to be Retained as Proof

The various documents that are required to be retained as proof against the Income Tax Refund are as follows:

  • Completed Relevant ITR form along with ITR V
  • Form 16 A – For TDS
  • Form 16
  • Form 12 B
  • Statements or Documents validating Tax Exemptions or Deductions that are applicable
  • Registered Bank Account Statements
  • Gift Deeds
  • Copy of receipt or Challan for the tax paid
  • Copy of Intimation email from the ITD’s IT Department

FAQs

  • Q: What is Income Tax, and what is meant by Income Tax Refund?

    Ans: Income Tax Refund refers to the type of Direct Tax levied on the income, as in salary earned on a routine basis or other sources of income like a lottery winning, dividends, asset sales, etc. earned by individuals. It is collected by the Income Tax Department of India. 

    It is paid by individuals as well as organizations and is the primary source of revenue for the Government of India. No tax is levied on income related to agricultural sales or profits.

    Income Tax Refund refers to the excess of the Tax amount paid by a taxpayer for one tax-paying session, which is reimbursed by the Income Tax Department after the taxpayer raises an Income Tax Refund claim.

  • Q: Is it mandatory for a taxpayer to file ITR to get reimbursement against excess tax paid by the taxpayer?

    Ans: Yes, a taxpayer must file Income Tax Return to get reimbursement against excess tax paid by the taxpayer. Also, this process is backed as one of the provisions of the Income Tax Act, 1961. It states that taxpayers are required to file their Income Tax Returns in the applicable Year of Assessment, on or before the 31st of July of the said year to raise an Income Tax Refund claim and receive reimbursement
Written By: Paisawiki - Updated: 12 April 2021