Income Tax Refund Status For FY 2023-24 (AY 2024-25)
Income Tax Refund is issued by the Income Tax Department if a taxpayer has paid more income tax than was due for the financial year. Individuals/Businesses pay income tax through TDS deducted, advance tax on the basis of anticipated liability, or self-assessment tax which might exceed the actual tax liability. In some cases, an income tax refund can also arise in case the tax liability is reduced by claiming deductions, exemptions, set off of losses, or tax credits while filing the income tax return.
Post-filing, the Income Tax Authorities assess the taxpayer’s tax liability. In case the tax liability assessed exceeds the amount paid, the excess tax paid is refunded to the taxpayer along with interest at 0.5% per month or part of the month (i.e. 6% per annum) until the date of refund.
In this blog, you will gain an understanding of the following:
- Calculation of Income Tax Refund
- Process to Claim Income Tax Refund
- How to check the ITR refund status
- Meaning of different status of refund
- Taxability of income tax refund
- Time Duration for a Tax Refund
- Mode of receiving the refund
- Interest on the Income Tax Refund
- Process to claim a refund on missed ITR filing
- Income Tax Refund Helpline
How to Calculate the Income tax Refund with Example?
If you paid more taxes than you were required to pay, you can claim the additional amount as an income tax refund.
Income tax Refund = Total Taxes paid – Total tax liability
If the taxes paid (either by way of Advance Tax or TDS or TCS or Self-Assessment Tax) are more than the actual tax amount due, then the excess tax paid can be claimed as a refund. The income tax department will recompute the taxes and validate the refund claim before initiating the refund.
For example: Assume Mr. Gupta paid 3 lakh as an advance tax during the financial year. At the end of the financial year, he learns his tax liability is only 2 lakh. He can request a refund by filing an income tax return (ITR). If the assessing officer approves his request, the excess tax amount of 1 lakh will be credited to Mr Gupta’s pre-validated bank account.
3 lakh Advance Tax – 2 lakh Tax liability = 1 lakh Tax refund for Mr. Gupta
The excess amount will be refunded along with interest at the rate of 0.5% per month or part of the month. If the refund is received in September, then interest of Rs. 3,000 (1,00,000*0.5%*6) will also be credited to the bank account.
How to Check your ITR Refund Status for AY 2024-25?
If you are concerned about your tax refund status, you can check the status of the income tax refund in three different ways, here are the methods listed below.
1. Through the Income Tax Portal
Step 1: Visit the income tax portal and log in to your account
Step 2: Click on ‘e-File’, choose ‘Income Tax Returns‘ and then select ‘View Filed Returns’
Step 3: You can see the status of your current and past income tax returns.
Step 4: Click on ‘View details,’ and you’ll see the status of your income tax refund, as shown in the picture below.
2. Through NSDL Portal
Step 1: Visit the NSDL Portal
Step 2: Enter your PAN details, select the Assessment Year from the drop-down option for which tax refund is awaited and enter the Captcha Code
Step 3: Click ‘Proceed’ under the ‘Taxpayer Refund (PAN)’ option
You will be directed to a page that displays the ‘Refund Status’.
3. Through TRACES
Step 1: Log in to the income tax portal
Step 2: Click on ‘e-File’, select ‘Income Tax Returns’ and hit ‘View Form 26AS’
Step 3: You will be directed to the TDS Reconciliation Analysis and Correction Enabling System (TRACES) page, and Click on ‘View Tax Credit (Form 26AS/Annual tax statement) at the bottom of the page
Step 4: Select the Assessment Year from the drop-down menu, and select view as ‘text’
What does my Refund Status Mean?
Here’s a list of different types of status of refund with meanings:
| S.No | Status of Refund | Meaning and Solution |
1. | No E-filing has been done for Current AY | This could mean your IT return was not filed at all. You can double-check the Assessment Year that you checked your refund status for. Remember, Financial Year (FY) 2022-23 corresponds to Assessment Year (AY) 2023-24 |
2. | Under Processing | This means that the income tax department has still not processed your income tax return. Please check your refund status after a month to see if it has been updated. |
| 3. | Refund Issued | This means the income tax department has sent the refund to you (by cheque or by direct credit to the bank account number you provided while e-filing). |
| 4 | Processed with No Demand No Refund | The most common case is you filed with no refund and no tax due. It could also be that you did file for a refund, but the income tax department denied it because their calculations did not match yours.This can generally happen because of a mismatch of TDS data or incomplete or improperly filled sections in the original filing.If you forgot to include some deductions while filing, you can revise your returnWhen the income tax department differs on the information you’ve provided, they would have also sent you an intimation u/s 143(1) explaining why. You can now fix the errors and file a rectification to support your refund claim.You can get help from an expert who can go through your tax notices and tax returns to best guide you. The expert can also help you file a rectification. |
| 5. | Refund Failure | This means the income tax department has sent the refund to you (by cheque or by direct credit to the bank account number you provided while e-filing) but the bank details provided were inaccurate, due to which the refund was not processed. To resolve this issue, Log in to incometax.gov.in, enter the correct bank details with the IT department, and validate the bank details. After you pre-validate the bank account, apply for the ‘Refund Reissue’ through the e-filing portal. Log in to your account->Services->Refund Reissue. |
| 6 | Case Transferred to Assessing Officer | This typically indicates that the IT department needs further clarification/information regarding the income tax return that you filed. The Assessing Officer would like to discuss things further with you.In some cases, this could also mean that you have some past taxes outstanding with the IT department which will be adjusted against the tax refund requested by you. On receiving such a message, contact the AO (Jurisdictional Assessing Officer) for your region. |
| 7 | Demand determined | This means your refund request has been rejected, and in fact, the IT department finds that you owe them taxes. You may also have received a notice from the income tax department stating the exact amount of tax outstanding and the reason for it.This can also happen because tax details are incomplete or improperly filed in the original return, withholding income information is not included, or TDS is mismatched.Read the intimation the IT department has sent you carefully and figure out where the problem occurred. Cross-check with your own e-filing records to verify the information you provided was accurate.If you find that your own refund request was indeed erroneous, pay the tax demanded by the IT department within the time limit mentioned in the intimation. If you think the IT department made a mistake, you can update your information if necessary and file a rectification supporting your refund claim.We can connect you to an expert who can go through your tax notices and tax returns to best guide you. They can help you file a rectification. |
| 8 | Rectification Processed Refund Determined | This message again goes out only to taxpayers who had been served an intimation to rectify their original returns. The rectified returns may be completely or partially accepted by the IT department.Based on the rectification, the IT department has calculated the refund amount and credited the refundSuch a message is shortly followed by a revised intimation and the refund amount from the IT department. |
| 9 | Rectification Processed Demand Determined | This message again goes out only to taxpayers who have been served an intimation to rectify their original returns. The IT department may completely or partially accept the rectified returns.However, the IT Department maintains that you have outstanding unpaid taxes. You will also receive an intimation with the exact amount that is outstanding and will have to pay this off within 30 days of receipt. |
| 10 | Rectification Processed No Demand No Refund | This message again goes out only to taxpayers who have been served an intimation to rectify their original returns. The IT department may completely or partially accept the rectified returns.Based on the rectification, the department arrives at the conclusion that you neither owe any extra taxes nor do you qualify for any sort of refund of taxes already paid.You will receive a revised intimation clarifying this fact.We can connect you to a tax expert who can go through your tax notices and tax returns to best guide you. They can then help you file a rectification. |
Income Tax Refund Taxable?
No, the refund amount is not taxable. But, the interest received on the tax refund is taxable. The rate of tax on the interest would be as per your applicable tax slab rate.
What is the Time Duration for a Tax Refund?
The time taken to receive the income tax refund entirely depends on the Income Tax Department’s internal process. Generally, it takes around 7 to 120 days, with an average time of 90 days after you have e-verified your return. The Income Tax Department implemented a new refund processing system to enable faster refund processing with an expected turnaround of a few days instead of a few months.
Consistent with this objective, the average ITR processing duration has been reduced to 10 days for returns submitted in the AY 2023-24, as opposed to 82 days for returns submitted in the AY 2019-20 and 16 days for returns submitted in AY 2022-23.
What is the Mode of Receiving the Refund?
The Income Tax Department will send the refund amount through electronic mode (direct credit to the account) or through a ‘Refund Cheque’. You must enter the correct bank account number and IFSC code with complete address details, including the PIN code, at the time of filing your return to receive refunds. Refunds sent through cheques are dispatched to the address mentioned in the ITR through speed post.
What is the Interest on Income Tax Refund?
When the refund amount is more than 10% of the total tax payable for that particular year, you will receive a simple interest on the tax refund. Interest is computed at 6% per annum (0.5% per month or part of the month) on the refund amount. Here’s how the interest on refund is computed:
How to Claim Refund for Missed ITR Filing on Due Date?
The deadline to file your ITR for non-audit cases was 31st July 2024. However, if you cannot manage to file your taxes before the deadline, you can still file a late return, known as Belated Return. The last date to file a belated return is 31st December 2024. You can claim your tax refund through a belated return.
Income Tax Refund Helpline
You can contact the ‘Aaykar Sampark Kendra’ for any queries regarding income tax refunds. The toll-free helpline of the Aaykar Sampark Kendra Kendra is – 1800-180-1961. You can even send a mail with your refund query to refunds@incometax.gov.in.
For refund-related queries or modifications in the refund record processed at CPC Bangalore, you can contact – 1800-425-2229 or 080-43456700. For any payment-related query, contact the SBI Contact Centre toll-free number at –1800-425-9760.