Guide to Claim Income Tax Refund Online

Guide to Claim Income Tax Refund Online

When it comes to an income tax refund, people in India are unaware of what it is and how to claim an income tax refund online. As a matter of fact, when you successfully file your income tax return (ITR), the tax department assesses your file, and the refund (if any) is credited into your pre-validated bank account.

How to Check Income Tax Refund Status Online?

The Income Tax Department of India offers an online facility that allows taxpayers to check the income tax refund status online. You can check the refund status after ten days of filing your ITRs. All you need to enter is your PAN Card Number and select the assessment year.

Follow the steps below when checking the income tax refund status online -
1. Visit the tax e-filing website and log in with your credentials - Date of Birth (DOB), Password, and captcha code.
2. In the ‘My Account' section, select ‘Refund/Demand Status’.
3. The following information is displayed on the screen -
  1. Assessment Year
  2. Status
  3. Reason (if there is any reason for refund failure)
  4. Mode of Payment
  5. You (the taxpayer) are eligible for an income tax refund if the tax paid to the Indian government is cumulatively more than the Tax Deducted at Source (TDS), self-assessment tax, and advance tax.

How does the Government Process the Income Tax Refund?

Once you file your ITR, the tax authorities at the Centralised Processing Centre (CPC) in Bengaluru will process your application. If you are due for any reimbursement during the assessment, an income tax refund order is generated and transferred to your bank account.

How is the Income Tax Refund Payment Processed?

There are two ways in which the payment of income tax refund is made -

Direct Credit

Here, the income tax refund is credited into your bank account via NECS or RTGS. However, ensure that your complete account details - account number, IFSC code, and your address - are available in your ITR.

Through a Cheque

If the authorities are unable to understand your bank details or the details provided by you are not correct, the income tax refund is paid via cheque to the account number mentioned in your ITR file.

Types of Income Tax Refund Status

  1. Non-Determined
It means that your ITR is not assessed. You can check the status of the same after a few days.
  1. Refund Paid
It means that your income tax refund has been credited to your bank account or sent to you via cheque.
  1. Refund Failed
It means that an income tax refund cannot be credited to your account because of improper bank information.
  1. Refund Expired
The cheque issued by the IT department is valid for 90 days. If it expires, you have to get it reissued under your name.
  1. Cheque Encashed
It means the cheque sent by the IT department was received by you and has been encashed as well.
  1. Refund Returned
It means the refund cheque sent to you was returned to the IT department. Further, your refund request will be cancelled if this happens, and you might have to raise a claim again.
  1. Refund Adjusted Against Last Year’s Outstanding Demand
If there are any pending taxes under your name for the antecedent fiscal year, your refund amount will be used to adjust the same. However, before the IT department does so, they will inform you regarding it beforehand.

Process to Claim Income Tax Refund

As explained earlier, you are eligible to claim an income tax refund when you pay taxes higher than your liability. Now, even though every person in India has to pay income tax based on the tax slab rates imposed by the government, some people pay additional tax. It could be due to any of the following reasons -
  1. Unable to make investment declarations on time
  2. Tax paid in advance due to anticipation of increment, which eventually did not happen.
  3. Tax deducted from investment sources such as Fixed Deposits (FDs)
In such cases, the Income Tax Department of India allows you (the taxpayers) to claim an income tax refund. Since it is your hard-earned income, understanding the process to claim an income tax refund is essential. Here’s what you need to do -
  1. Visit the tax filing portal online.
  2. Log in with your credentials (for existing users) or register with your PAN Card (for new users).
  3. In the ‘Download’ tab, select the current assessment year along with the ITR form.
  4. When you open the downloaded Excel sheet, provide the details mentioned in your Form 16.
  5. If you have paid more tax, it is calculated automatically, and the refund amount is mentioned under the ‘Refund’ field of your ITR form.
  6. Confirm the details. An XML file will be generated and saved on your computer.
  7. On the portal, select ‘Submit Return’ and upload the generated XML file.

Interest on Income Tax Refund

Many times, people receive a slightly higher amount than the initial income tax refund they claimed. The difference in the amount claimed and the amount received is the interest given on the refund, and the interest is paid by the Income Tax Department of India. So, if the refund amount is 10% or more than the tax paid by you, you will mandatorily receive interest along with the refund.

As per Section 244A under the Income Tax Act, interest at the rate of 0.5% per month or part of the month is applicable on the refund amount. The interest is calculated from April 1 of the said assessment year until the date income tax refund is granted.
If there is any issue in calculating the interest paid on the refund amount, you can raise an online request to rectify the same.

For more information on this visit

Posted by Pooja
Team Taxaj

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