According to the Income Tax Act 1961, all Indian citizens earning above a specific limit are required to pay taxes according to the prevailing income tax slabs. However, there are various advance taxes like Tax Deducted at Source (TDS) or self-assessment tax, where you could end up paying more than the actual liability. But you can always claim a refund on the tax paid at the time of filing your Income Tax Return (ITR) for that year.
Here is all you need to know about claiming a refund on any additional income tax paid.
When can you make the tax claim?
Each assessment year taxpayers are required to file for their tax returns by July 31, unless the deadline is extended. Assessment year (AY) is the year which follows the financial year (FY). For FY 2019-20, the Income Tax Department has extended the last date of filing ITR from July 31, 2020, to November 30, 2020. So, if you have to claim a refund tax paid, you have to submit your forms before the due date.
How to claim the tax refund?
You can follow these simple steps to ask for a claim on excess tax paid:
File you ITR online using the specific forms and e-verify your income tax return. Click on ‘Taxes paid and Verification’ to verify your return
Post verification, the online system will assess your forms, and auto calculate if there is any refund, which you are entitled to receive (if any)
Your recompense amount will reflect in the ‘Refund’ row in the form online. This figure is the temporary estimation and not necessarily the actual amount, which will be reimbursed by the IT department. Your repayment will be calculated once the IT department processes your return request.
Further, you can use any of these three methods to know the status of your tax refund:
Track the reference number for any update on your registered email or mobile phone number
Log in to the income tax e-filing website and check your refund status
Determine your reimbursement position on this link. However, you must ensure you have pre-validated the details of the bank account (where you wish to receive the settlement) on the e-filing website and also linked it to your PAN card.
What happens after the claim is made?
Once you register your tax refund claim, the IT department will process your return and send you an intimation depending on the result of the processing. Generally, you will be sent a notice under Section 143(1), which might show one of the following things:
Your tax calculation in alignment with the IT department and there is no tax payable on your behalf
Your tax estimation is not correct according to the IT department, and you are liable to pay an additional tax or your refund is rejected or partially accepted, offering a different amount than you otherwise stated
Your calculation exactly matches that of the IT department, and you are eligible to get a refund claim of the amount mentioned
Generally, the intimation is sent on the registered email, along with an SMS on the registered mobile phone number. In case the refund is accepted fully or partially, the email will also include the amount and the reference number you can use to track the status of your refund.
You will receive the refund via cheque or a direct transfer to your bank account. Moreover, the IT department will also pay you interest on late payment, subject to specific terms.
With this detailed information, you can easily and cautiously file your income tax returns for FY 2019-2020.