Once your income tax return (ITR) is processed, it ideally takes 30-45 days for you to receive your refund. If you had filed your ITR before July 31 (or even by the first week of August), you should have received your refunds by now. More than three weeks have passed for those who filed it closer to August 31. So, now is the good time for all taxpayers to check if they have received the refund. There could be many reasons for a delay in refund. Know them all to make your refund process faster and better.
Last minute filing
Most taxpayers get on to filing ITR on or closer to the deadline. A total 5.65 crore people filed ITR this year; 1.47 crore of them filed it between August 27 and August 31 and a whopping 49.29 lakh people did it on the last day, that is, August 31. With most people doing it on the last day, it creates a backlog and the I-T department takes longer to process your refund. However, if you do not get your refunds or receive any communication from the I-T department within two months, you may have to review your ITR to find out if you made a mistake.
Paper-based verification of ITR
Besides filing ITR, you have to verify the returns. Instant online verification helps you complete the tax filing process from your end. There are many options to verify your ITR electronically. However, if you opt for a physical verification, it will take longer for your refund to get processed. Taxpayers can send their signed copies of ITR to I-T department within 120 days of submitting their returns online. The actual process starts only after CPC Bangalore receives the physical copy of your completed and signed ITR Form.
Mistakes in the tax-filing
If you choose a wrong ITR form, misspell critical personal details or put in wrong information, your refund will get delayed as the I-T department will take time to confirm and verify the same. There could also be mismatches in the figures that you had provided last year and what you did this year. In such a scenario, an IT official will look into your records thoroughly to check if you need to share additional details. The I-T department may intimate you with a request to produce additional information.
Discrepancy in income or tax amount
If there is any discrepancy in the income from various sources, the refund process may get delayed. This generally happens in case details mentioned in the Form 16 do not match with the TDS details in Form 26 AS. "Refund also gets delayed where ITR couldn't be processed due to proposed adjustment u/s 143(1)(a) or where it is defective u/s 139(9)," says Naveen Wadhwa, DGM, Taxmann. "Tax department sends intimation for failure to process the refund along with the reason to the assessee. In such a case, the assessee can raise the request on the e-filing portal for reissue of refund," he adds. Explaining the other reason, which often results in delaying the refund, Archit Gupta, Founder and CEO - ClearTax says, "The ITR is processed by the income tax department and a 'tax demand' is determined due to mismatch in the income submitted or TDS claimed by the taxpayer or any other reason." In this case, you will be intimated with the new tax demand due to which the process may take a little longer.
Incorrect bank account details
If you do not give correct bank account details, it will be impossible for the I-T department to process your refund even if all other formalities are completed. "The refund gets delayed due to various reasons, inter-alia, wrong details of bank account mentioned in the return, that is, wrong bank account number or IFSC Code, bank account mentioned for refund not being linked with PAN or not pre-validated at the e-filing portal," says Wadhwa of Taxmann. In this case, you can check the status of your refund online, which will show that your ITR is processed and refund intimation has been sent to the bank. Unless you have provided correct bank details, the money cannot be transferred. "In cases where the taxpayer has given wrong, old or dormant bank account information, the refund will not get credited. The taxpayer will have to submit updated bank account details through their log-in on the e-filing portal," suggests Gupta.
Wrong communication address
In case you make an error in your ITR and I-T department sends a communication, you will receive it only if you have provided correct communication details. "Tax authorities generally communicate via electronic mediums. An e-mail communication is sent containing intimation for processing of return, notice for defective return, intimation of refund failure, intimation of transfer of the ITR to jurisdictional assessing officer and selection of Case for Scrutiny Assessment with a corresponding notification via SMS on the registered mobile number," says Wadhwa. "Ignoring these communications can be troublesome for taxpayers. Therefore, you must recheck your communication in case of delay.
When ITR filed by a legal heir
In case of the death of the taxpayer, his/her legal heirs file the ITR on his/her behalf. If there is a mistake, the refund will get delayed. "If assessee files return as legal heir and mentions his own bank account details for refund, CPC shall ask the deceased person's juridical Assessing Officer to verify the details of the legal heir," says Wadhwa.
What should you do in case of delay?
If it has been more than a month and your refund is not processed, you may need to check the status on the e-filing portal. "Now a days ITR is processed within one to two months and refund gets credited after a successful processing of ITR. Taxpayer should regularly check registered e-mail ID or his e-filing account to check if there is any communication from the I-T department regarding the processing of ITR, proposed adjustment u/s 143(1)(a), defective return, failure of refund and transfer of the case to jurisdictional assessing officer etc," says Wadhwa.
However, if you do not get any status update, you may wait for at least two months before you act. "In case of a delay in the processing of ITR and refund, a taxpayer can submit a grievance through e-Nivaran Form under their e-filing account and seek a resolution from CPC-ITR under the grievance category 'Processing'," says Gupta of ClearTax.
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