What To Do If You Do Not Get Your Income Tax Refund?

The Indian Income Tax Department had notified in the month of April this year that it had issued income tax refunds worth Rs 5,649 crore to 7.39 lakh taxpayers during April 1-19, 2021-22. Out of which personal income tax refund which was equivalent to Rs. 3073 crore were issued to 7.23 lakh cases, and 15,206 taxpayers were given tax refunds worth Rs. 2577 crore.

Section 237 of the Income Tax Act, 1961 covers the crucial aspects regarding the refund of excess tax a taxpayer pays in India. One can claim an income tax refund when he/she has paid more tax amount than what he/she is obligated to pay. This tax paid may be in the form of TDS, TCS, Advance Tax, or Self Assessment Tax. All the deductions and exemptions get considered while calculating the tax and, ultimately, the refund payable.

However, receiving income tax refunds sometimes may not be as easy and simple as it may seem through the above discussion. Usually, it takes roughly 30-45 days to process the due refund from the date of e-verification of the respective income tax return. However, in cases where the income tax return acknowledgments are manually verified and sent to CPC Bengaluru, the duration of the refund process may increase.

Due to many procedural mistakes and other reasons, the income tax refunds on instances can get delayed to a considerable extent. The current pandemic and lockdown has further exacerbated the conditions and has seriously contributed to all the more pending unprocessed income tax refunds and delays in receiving the due amount. Thus, as per reports, particularly, for 2019-20, due to the COVID-19 situation, delays were experienced in the past months.

Team Gotaxfile is here to facilitate you with some crucial details regarding your income tax refund delays. We shall discuss below some of the primary reasons which contribute to the delay in receiving income tax returns -

* Income Tax Return is not verified -

One of the most probable reasons why there may be unnecessary delays in receiving your income tax refund is that your income tax return may not be duly verified. It is a crucial step in the entire procedure. If your return verification process is complete, only then you shall be eligible for the issue of refund to your bank account. Thus taxpayers are advised to check their return verification status beforehand.

* Filing your refund too early or too late-

Early and late filers can suffer delays in receiving their refunds because in the very beginning Income Tax Department is still expected to make some changes to their respective accounts. Such a situation can put early filers into trouble. In contrast, those who file late or just near the deadline are likely to suffer as it is a time of heavy traffic as many people submit their claims very near to the closing deadline.

* Implementation of new security measures –

Stringent security standards are enforced in force by the Income Tax Department to prevent the hazard of identity theft, which is a major threat in the present-day world. Some security measures are the reasons behind delayed returns as they extend the processing period of returns (or refund). If the department suspects that there has been identity theft and someone has tried to steal your identity, it can withhold the process. It would initiate again only when the investigation is complete and only if the department believes that you actually are who you claim to be.

Mistakes in the return filed –

The return process is also considerably slowed down if the income tax return filed is incomplete or
has some errors. The department slows down the processing of faulty returns. Mistakes generally include mathematical errors and anomalies in the taxpayers' personal information. The income tax department takes longer than usual to process the income tax refund for such tax returns. The Income Tax Department normally contacts the filer in case of some great error. However, the department itself corrects the minor errors. Hence, this measure saves time for the filer from filing an amended return.

* Incorrect Bank Information-

Nowadays, most income tax refunds are generally transferred electronically to the relevant bank account of taxpayers. Therefore, providing incorrect bank details such as the wrong account number or other information can even result in losing your refund. The income tax refund might get transferred to someone else's account. Hence ensuring that you mention the accurate details in the bank details form is of paramount importance.

* Bank Account needs prevalidation-

One can receive income tax refund only in those bank accounts which are prevalidated. Thus another reason for the delay can be that your bank account may not be prevalidated. This can be done online through the income tax department's official website. One can log in using their PAN and password and prevalidate their account by clicking on this option. The details required for pre-validation include the mobile number, bank account number, IFSC code, and the email ID linked to their respective bank account.

Thus the issues mentioned above are the primary reasons why the refunds get delayed and take longer than the usual time to process.

Measures to ensure prompt income tax refund processing

It is important to take some steps to ensure the timely processing of your income tax refund. These steps include:

1. Filing the return with utmost care and precision
2. Ensuring that the details provided are accurate and the submission takes place at the appropriate time
3. Confirming adherence to all the security measures notified by Income Tax Department to avoid any unnecessary delays

One must also note that as per Section 244 A of the Income Tax Act, 1961, in case of delay in processing the refund, the tax authorities are liable to pay interest depending on the different scenarios. The interest rate varies accordingly. You may also not receive your tax refund if the amount is set off against outstanding tax dues.

To track the status of your refund, you can log into the Income Tax Department official website with your user id, name, and other required details, from the 'View e-filed Return/Form' and select the 'Income Tax' option from the drop-down menu. Select the acknowledgment number for whichever year is applicable to your return. The status of the refund gets displayed in a new window.

Gotaxfile can promptly support you in managing your income tax compliances!

One can swiftly put to rest the complexities surrounding his/her income tax refund with Gotaxfile. It is a one-stop store for all your income tax-related inquiries, consultancy, and help regarding return filing matters, income tax refund delays, and other related issues. We provide experienced professionals who deliver excellent backing and advice regarding tax and finance. Our trained experts have carved a niche for themselves in the industry. They would not only guide you through the entire process but would also help you understand the procedure, possible areas of mistake, alarming areas where utmost precaution is needed, and the implications of non-compliance as well.

Thus, engaging Gotaxfile for all income tax-related matters would help you immensely in the long run. It will save you from the hassles involved in the tax and finance domains. Be it your tax refund inquiries or your company registration; we remain at your disposal! So what are you waiting for? Gotaxfile is here to assist you! Quickly avail of our excellent tax filing services.