Income Tax (I-T) department has been given an internal target of issuing refunds within a period of seven days.

This came up during the process of drafting the budget. Meeting such a short deadline is a challenge in itself.

However, the department has also been able to reduce the average time taken for issuing refunds in the financial year 2022-23 to 16 days as against 26 in the fiscal before.

The country has also achieved the highest-ever direct tax collection of RS 16.61 lakh crore

This was revealed by the chairman of the Central Board of Direct Taxes (CBDT) Nitin Gupta who expressed that the time can be further shortened.

Gupta said the amount of refunds issued during the financial year 2022-23 has been higher by RS 18,000 crore as compared to its previous fiscal. In the year as much as 42 per cent of the returns were processed within 24 hours and even the refunds were issued at the same pace.

How can I Claim my Income Tax Refund?

The easiest way to file for your tax refund is to declare your investments in Form 16 (life insurance premiums paid, house rent being paid, investments in equity/NSC/mutual funds, bank FDs, tuition fees, etc.) while filing your IT return and submit the necessary proofs. If you’ve failed to do so and have been paying extra taxes you think you could have avoided, you will need to fill out Form 30.

Form 30 is basically a request for your case to be looked into and the excess tax that you have paid is refunded. Your income tax refund claim needs to be submitted before the end of the financial year. Your claim needs to be accompanied by a return in the form (prescribed under section 139).

Here are some points you need to keep in mind:

  • Income tax refund claims will not be considered if six successive assessment years have been completed.
  • The refund amount must be less than Rs.50 lakh for a single assessment year.
  • Interest will not be offered on refund of late claims.
  • If the delayed claims require verification, the assessing officer could reconsider the claim.

How do I Track My Income Tax Refund?

The IT department allows you to track the status of your refund. If your refund procedure has not been completed by your officer in charge, you will receive a message notifying you of the same.

Just follow these two steps to claim income tax refund.

  1. Get Refund through Direct Transfer: Excess tax paid can be refunded to you by crediting your bank account with ECS transfer. RTGS/NECS are also used to transfer the tax refund directly into your account, using your 10-digit account number and MICR code, through the State Bank of India. You can track your income tax refund through the http://www.incometaxindia.gov.in website or through NSDL-TIN website by clicking on “Status of Income Tax Refunds”. You will then need to enter your PAN number and assessment year for refund details.
  2. Refund by cheque: You can track this with the speed post service that has been tasked with delivering it, using the reference number that the IT department will give you.

Interest on Delayed Income Tax Refund

Under Section 244A of the Income Tax Act, in case the refund payment is delayed, the Income Tax Department is liable to pay interest at 6%. The interest applicable to your refund amount shall be computed from the date on which the tax was paid to the date on which the refund was made.

For example, if you claim a refund of Rs.10,000 for AY 2020-21 and you received the refund in March 2021, the interest applicable to your refund will be computed from April 2020 to March 2021.

How to Update Details with Income Tax Department  

In case you want to update details such as your mobile number, email address, or address with the IT department, follow the steps mentioned below: 

Step 1: Visit the official website of the income tax department.  

Step 2: Log in to your account. 

Step 3: A dashboard will appear on the screen. Click on it.  

Step 4: Modify your bank account and/or contact details.  

The central TIN database is automatically updated with the changes you made to your bank and address information. You will receive the refund amount on the basis of these changes.  

How to Apply for Refund Reissue 

After verifying your income tax return, you can reach out to the IT department to check your income tax refund’s status. One of the main reasons for delay in the income tax return refund might be an issue with your bank account or address information. In this case, you need to request a ‘refund reissue’ to the IT department.  

This request can be placed only after you receive an intimation. The steps for refund reissue application are as follows: 

Step 1: Visit the official website of the income tax department.  

Step 2: Log in to your account. 

Step 3: A dashboard will appear on the screen.  

Step 4: Click on the ‘Pending Actions’ option.  

Step 5: Click on the ‘Refund Reissue’ button.  

Step 6: The refund reissue page will appear on the screen. Here, click on the ‘Create Refund Reissue Request’ option.  

Step 7: Choose the bank account where you wish your refund to be deposited.  

Step 8: Click on the ‘Proceed To Verification’ button.  

Step 9: An Electronic Verification code (EVC) is required to submit the request for refund reissue.  

Step 10: Click on ‘Submit.’ The status of your refund reissue will be displayed on the dashboard.