The income tax (I-T) department has said income tax refunds of Rs 1.19 lakh crore have e been issued up to 8 September 2022, which are 65.29% higher than refunds issued during the corresponding period in the preceding year.

 

Many of you might have received your I-T refund by now. However, some may still be waiting for it. There could be various reasons for this — either a mistake from the I-T filer end or the process might be taking longer at the I-T department. 

 

In this blog post, we discuss the possible reasons and actions you must takeif you are yet to receive the I-T refund.

 

You will receive your tax refund only after your income tax return (ITR) has been processed and after you have verified it. After your return has been processed, you will receive a message and email from the Income Tax department to that effect.

 

If your income tax return has been processed and the refund has been verified but is still pending, you should determine the status of the refund. You can check the progress of your refund on the NSDL website or the income tax e-filing website. To check the status of your refund, log on to www.incometaxindia.gov.in or www.tin-nsdl.com and click on the “Status of Tax Refunds" tab, enter your PAN and the assessment year (AY) for which your refund is pending.

 

If the refund has already been processed by the department, you will get a message mentioning the mode of payment, a reference number, status and date of refund. If the refund has not been processed or has been declined, the message will say so.

 

The income tax refund could be delayed if there was a problem with pre-validating your bank account or if your PAN card was not linked to your bank account. The income tax refund won’t be credited to your bank account if you haven’t pre-validated it.

 

While most tax refunds get credited to the assessment bank account within a few weeks after ITR is filed, there could be delays in certain situations.

Here are major reasons under which a tax refund could get delayed:

 

1) Incorrect bank account details

 

There are chances that taxpayers did not give the correct bank account number or other bank details while filing the ITR. So, you should properly check the bank account details before filing ITR.

 

To rectify incorrect bank details, log in to the e-filing portal (www.incometaxindiaefiling.gov.in). Navigate to “My Account" and click on “Refund re-issue request." Follow the steps and enter the correct details of the bank account and submit the request. You could receive the refund within a few days.

 

2) Need for additional documentation/information

 

One of the common reasons for not getting refunds is the need for additional documentation or information. You might have missed mentioning some information while filing ITR.

 

3) Fabricated information

 

You may have coded inadequate or fabricated information to avail benefit. To rectify the same, you should provide complete and appropriate information to reduce the chances of rejection or delay in the refund procedure. 

 

If you have wrongfully claimed deductions or rebates on investments, then you are likely to receive an email to reconfirm whether the investment amount mentioned in the returns is correct. The tax department has, over the years, deployed artificial intelligence to spot any unusual or out-of-turn deductions or rebates or benefits being claimed that the taxpayer wouldn’t have claimed earlier. If you fail to present the relevant documents, then a tax evasion penalty of up to 300% could be levied and the assessing officer could initiate penalty proceedings.

 

4) Mismatch in the TDS/TCS claimed

 

The mismatch in TDS claimed in 26AS could be due to the wrong filing of TDS return by the employer or TDS deductor (i.e. bank etc.), and you may need to approach them to correct their TDS return.

 

5) Refund request under process

 

The delay could also be at the income tax department level. It might take time to process the request, or a delay could be even at the bank’s end. You can call the toll free number given on the I-T portal to follow up on this.

 

6) Taxes paid not being reflected

 

Aside from refund delays in some cases, the I-T authorities have also sent emails to some people asking why taxes haven’t yet been paid. Even some of those who have paid taxes have been receiving such mails. These are not I-T notices but simple queries sent by email.There is a lag of about two days between the tax payment done through the online tax payment portal and the same being reflected in your Form 26 AS, a consolidated statement of all taxes paid. But this assessment year, taxes that have been paid before filing the returns in July 2022 aren’t being reflected and individuals are being told to clear the tax dues.

 

7) Not disclosed foreign assets

 

Individuals who have foreign assets are being sent notices. Either foreign travel information is being used or residential status being traced to unearth taxpayers evading taxes on foreign assets.

 

If you were working abroad and had a bank account in the country earlier, or received employee stock options of internationally listed companies as you worked for a multinational company, then you would have to justify how you acquired these and why the same wasn’t mentioned in your tax return. Apart from capital gains during sale, even dividend income from these international equities would have to be declared under the Schedule for Assets and Liabilities

 

There are many who are receiving refund failure error messages even though they have claimed refunds and received them in the same bank account last year. This issue could be due to matters that are beyond the purview of the income tax department. Those who received refunds in the same bank account last year are now receiving a refund failure notice stating PAN (permanent account number) is not linked (to the account). 

 

Probably failure to renew know your customer (KYC norms in bank accounts) too could lead to refund failure. Some simple steps may rectify this. For one, verify that your bank account mentioned in the tax returns is correct. Also check whether your Aadhaar and PAN are linked to your bank account. Bank-linked KYC documentation too needs to be in place.

 

What should you do to get the tax refund?

 

If you have filed your income tax return and have not received an income tax refund within a reasonable time, first confirm if you have verified your income tax return online or offline. ITR filing is incomplete and is not processed till it is e-verified. In case the ITR V is not verified, you can still do it. I-T Department offers five platforms to verify an ITR — net banking, bank ATM, Aadhaar, bank account, and demat account.

 

Additionally, you should check your email to see if there is any communication from the income tax department seeking a response. It's vital to respond to the email, if any, at the earliest. 

 

You can also raise a service request on the e-filing portal. If your refund has failed, you can submit a refund re-issue request using the Income Tax e-filing portal.

 

Do not take any notices or emails from the tax department lightly. The mails may well be routine, but it’s best to settle the issues raised right away than ignore it.

 

Avoid phishing emails

 

Phishing emails in the name of the income tax department, especially related to tax refunds, are very common. In most cases it is very difficult to recognize that it’s a fraud email, because domain names mimic those of genuine income tax department email and website addresses. Fraudster also copy the logo, content, color theme and other aspects of the original website. Therefore, you as a taxpayer need to beware of such phishing emails; else, you may end up losing money.

 

Remember that the tax department does not seek any confidential or financial information of the taxpayer over email. If an email seeks confidential financial information such as bank details, passwords and OTPs, get cautious and double-check the authenticity of such an email and website. Check for the domain name carefully. Mostly, fake emails will have misspelt or incorrect sounding variants of websites of the Income Tax Department. You can also check the message header – for example, in Gmail, it can be viewed by selecting the option ‘Show Original.’