Tax Refund: A detailed guide

May 22, 2023

Tax Refund: A detailed guide

Income Tax Department offers an online tool for monitoring refund status. Taxpayers can check their return status ten days after sending their refund request.

A taxpayer must insert his PAN number and choose the Assessment Year to check the refund.

According to income tax and other direct tax rules, tax refunds occur when a person's tax payment (or payment made on their behalf) exceeds the amount for which they are legally liable. It is stated, Under Sections 237 to 245 of the Income Tax Act of 1961.

The first step in delving deeper into this topic is to understand what it is all about 

What is an Income tax refund?

Income tax return

It is sometimes the case that people pay more tax than they should. You may be eligible for an income tax refund, for instance, if tax deducted at source (TDS) exceeds the amount you are required to pay.

Getting a refund on your ITR is one way to ensure you get the additional tax you paid back.

To simplify this process, the government offers online income tax refunds. It typically takes 20 to 45 days for your income tax refund to be processed once you have filed your IT returns and confirmed them.

You should follow up with the Centralized Processing Center if it takes longer (CPC). Online tracking of tax refunds is possible.

When may you file for a tax refund?

Taxpayers can claim Refunds under these conditions.

1. Deduction of extra TDS: 

An employee can claim the benefit of such investments while filing their return of income and therefore claim a refund of the higher taxes paid.

The employer generally deducts taxes after considering various documentary proofs of employees on 80C investments, medical insurance premiums under 80D, etc. Some individuals may not fall within the taxable bracket because their income would be less than Rs 2.5 lakh.

Even so, they would have had to pay taxes on their income. Which is why they can claim a refund of the excess tax deducted.

2. Deduction of TDS from extra income: 

If the sum exceeds the maximum outlined in the Income Tax Act, banks may deduct TDS on interest accrued on bonds or FDs.

3. Payment of Extra advance tax:

In the given FY, the advance tax paid based on self-assessment exceeded the actual tax liability. This advance tax may be refunded when submitting an ITR.

4. Payment of additional taxes:

Income-tax officers may add a certain amount to a taxpayer's income during tax proceedings.

The appeal authorities have the right to remove such amendments. If the additions were incorrect, to begin with, the taxpayer receives a refund for the taxes he would have paid.

5. Double-taxed income:

India has signed Double Taxation Avoidance Agreements (DTAA) with several nations.

If the taxpayer gave the tax in another country, this agreement enables him to get a tax refund. Under the terms of this DTAA agreement, taxpayers can request a refund for any overpayment.

Income tax refund

Claim income Tax returns

Declaring your investments on Form 16 is the effortless approach to requesting a tax refund.

You must complete Form 30 if you have been paying excess taxes due to your failure to comply with this requirement. Before the end of the fiscal year, you must file your income tax refund claim.

The IT department processes the ITR refund if it has been confirmed offline or through one of the online methods. Additionally, the IT department's return is subject to evaluation and verification.

Income Tax Refund Claim Deadline

You must claim Income tax refunds within one year of the end of the fiscal year. You can, however, file a late return up until December 31st if you fail to submit your income tax return by the deadline. In the case of late claims, there will be no interest in refunds.


Individuals may pay more tax than they should on occasion. If your tax deducted at source (TDS) exceeds the amount you are obligated to pay, you may be eligible for an income tax refund.

Taxpayers can verify the status of their return ten days after receiving their refund. Income Tax authorities can add a certain amount to a taxpayer's income.

If the additions were wrong in the first place, the taxpayer gets a refund. India has signed Double Taxation Avoidance Agreements with many countries (DTAA).

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