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Income Tax Refund FAQs AY 2018-19

Explains various provisions, scenarios of Income Tax Refund!

Income Tax Refund FAQs

1.What is a tax refund ?

Tax refund is the amount, which the government gives back to a taxpayer who has paid excess taxes.

2.How to claim tax refund ?

You need to file an income tax return to claim your tax refund. The amount of refund receivable is computed and shown in the tax return.

3.In which mode tax payer will receive the refund ?

Income tax department (ITD) will made refund either through electronic mode i.e. direct credit to account or through Refund Cheque. Tax payers are required to enter correct Account number and IFSC code along with complete address details including PIN code at the time of filing of Return.

Refunds sent through cheques are dispatched to the address as mentioned by the tax payers through Speed Post.

4.How can check my refund status ?

To check the refund status PAN and assessment year are mandatory

To check the refund status please refer the link IT Refund Status

5.How is the interest on tax refund get calculated ?

If the amount of refund is more than 10% of the total tax payable for that particular year then tax payer entitled to receive simple interest on tax refund.

Interest is computed @ 0.5 per cent per month on the amount of refund. The interest is computed from the beginning of the next financial year till the date of grant of the refund.

6.Is the refund taxable ?

The amount of refund is not taxable.

But interest received on tax refund is taxable. The rate of tax would be as per your applicable slab rate. You may include it in the taxable income of the year in which such refund is received.

7.Refund Status shows that Refund was processed through Direct Credit mode which had failed ?

It means that Refund for credit to account maintained with SBI had failed. Possible reasons may be

  1. Account details are incorrect
  2. Account had been closed
  3. Operations in the Account had been stopped /restricted /On Hold
  4. The Account may be Fixed Deposit or Loan of PPF account.
  5. The Account may be NRI account
  6. The Account holder may be deceased.
8.Refund Status shows that Refund had returned ?

The taxpayer may give correct bank details and raise refund reissue at e-filing portal/Assessing Officer.

Paper refund- Tax payer may give correct details about address and raise refund issue request at e-filing portal/Assessing Officer.

In any mode refund is failed, tax payer can submit the refund reissue request.

To submit the refund reissue request please refer the link IT Refund Reissue

9.Refund Status shows that Refund had been adjusted against outstanding demand of previous year. What does that mean ?

This means that Refund for the current year had been adjusted against outstanding demand of previous Assessment year either in-part or in-full. Tax payer can check the outstanding demand details in ITD login.

To check the outstanding demands and other notices please refer the link Outstanding Demands

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