What to Do if Your Income Tax Refund is Delayed ?

Each year, when it is time to file tax returns (ITRs) , one of the top things on every taxpayer’s list of concerns is the income tax refund. Will it be paid on time? Or will there be an income tax refund delay? And

The Income Tax Department in India collects income tax through different channels like tax deducted at source (TDS) , advance tax and tax collected at source (TCS). Before you file your income tax return (ITR) for an assessment year, you need to evaluate your total income tax liability . Depending on this amount, you may incur an additional liability in the form of self-assessment tax or be eligible for an income tax refund.

To put it simply:

• If the total income tax payable exceeds the sum of your TDS, TCS and advance tax, you need to pay the balance amount as self-assessment tax.
• If the sum of your TDS, TCS and advance tax exceeds the total income tax payable, you are eligible for an income tax refund.

Once you file your ITR, you can track the income tax refund status online. Sometimes, the income tax refund may be pending or delayed due to various reasons, as we’ll see in this article.

Before learning how to track your income tax refund status online, you need to know if you are eligible for a refund in the first place. To be eligible for an income tax refund, the following conditions need to be satisfied:

• Excess Income Tax Payment: To be eligible for a refund, you need to have paid excess income tax during the financial year. This tax may have been paid as advance tax, TDS or TCS. Additionally, you may also be eligible for a tax refund if a certain income has been taxed both in India and another country, and if India has a double taxation avoidance agreement (DTAA) with that country.
• ITR Filing: You also need to file your income tax return within the due date to be eligible for an income tax refund (if you have paid excess income tax). The due date for individuals to file their ITRs is generally July 31 of the relevant assessment year. The due date for businesses that require audit is generally October 31. The Indian government may extend these dates if necessary.

Also Read: How to File Income Tax Return (ITR) Online?

Generally, the income tax refund is paid after your income tax return has been verified and processed. The refund will be credited to the bank account you have provided in your income tax return. So, ensure that the account is linked to your PAN and active. If these conditions are met, you should typically receive your refund within 20 to 45 days after the ITR has been processed.However, if you have not received your income tax refund even after filing your ITR on time, you need to check your income tax refund status online. This will give you more clarity on whether there is an income tax refund delay and what you need to do about it.The income tax refund status can be any of the following, depending on the stage of ITR processing:

• Refund credited to your bank account
• Refund not determined
• Refund unpaid
• Demand determined
• E-filing not completed for the assessment year
• Contact your jurisdictional AO

To check your income tax refund status online, you need to follow the steps outlined below:

• Step 1: Log into the income tax e-filing portal using your login credentials. Your user ID is your PAN and your password will have to be set by you.
• Step 2: Hover over the ‘e-File’ option on the home page.
• Step 3: Then, select ‘Income Tax Returns’ and choose the option labelled ‘View Filed Returns.’
• Step 4: You then need to scroll and find the relevant assessment year to check the incomeincome tax refund status.

Often, if the income tax refund is delayed or has failed, the reason will be listed on the income tax e-filing portal. Depending on the reason for the delay, you can plan your course of action accordingly. Also Read: All You Need to Know About Filing Income Tax Returns (ITR)

If you find that your income tax refund is delayed, you need to determine the reason behind this, so you can proceed to take the measures required to secure your refund. Check out the common reasons for a delay in the income tax refund status and what you can do in each case.

• Step 1: Log into your income tax e-filing account
• Step 2: Head to the ‘Services’ option on the home page.
• Step 3: Click the ‘Refund Reissue’ option.
• Step 4: You will be redirected to a new page, where you need to select the ‘Create Refund Reissue Request’ option.
• Step 5: You can then view the assessment year for which theincome tax refund status shows a failed refund. Select the relevant AY and proceed.
• Step 6: View and verify your bank details on the next screen.
• Step 7: Submit the refund reissue request.

• Reason 1: Mistakes in Your Income Tax Return Your income tax refund delay may be due to errors in your income tax return. To avoid this issue, ensure that you enter all the details correctly, like your name, address, contact information, income figures and deductions. What To Do: If your refund is delayed because of one or more mistakes in your ITR, you need to file a revised return within the due date, which is December 31 of the relevant assessment year or the date when the assessment is complete, whichever is earlier.
• Reason 2: Request for Refund is Rejected When you file your ITR, the Income Tax Department will also compute your tax liability and compare it to the calculations presented in your return. In case you owe more income tax, your income tax refund status may show that your refund request is rejected. What To Do: If you find that your refund request has been rejected based on your income tax refund status, you need to check your ITR for any mistakes. If your computation is incorrect and you owe the IT Department any taxes, ensure you settle your tax dues and file a rectification return u/s 154.
• Reason 3: Incorrect Bank Account Details Another reason you may not receive your income tax refund is if the bank details provided in your ITR are incorrect. You may have provided the wrong bank account number or there may be a name mismatch between your PAN and bank account. What To Do: If this is the reason for your income tax refund delay, you need to submit a refund reissue request. Here is how you can do this:
• You can then check your income tax refund status once more to ensure that the processing and verification are on track.
• Reason 4: General Delays Due to Processing Time Your income tax refund status may also show a delay due to the general time it takes to verify and process income tax returns. On account of the high volume of ITRs filed, the IT Department may take time to process your ITR and credit your refund. What To Do: In this case, you simply need to wait for your ITR to be processed. You can monitor your income tax refund status online to ensure that there is no additional request or issue with the ITR processing.
• Reason 5: Additional Information Required If your ITR is under processing, the IT Department may require some additional information or documentation to verify the authenticity of your claim. In this case, there may be an income tax refund delay. What To Do: Submit the additional documents required and verify whether the concerned assessing officer has received the paperwork. Then, continue to monitor your income tax refund status for any new updates.
• Reason 6: Scrutiny of Income Tax Return Every assessment year, the IT Department selects a few income tax returns for scrutiny. If your ITR has been selected for scrutiny during a particular year, it may lead to a slight income tax refund delay. What To Do: In this case, there is nothing specific that you can do to expedite the process. However, you can check the income tax refund status online to see if there is any additional requirement from the assessing officer.
• Reason 7: Mismatch Between ITR and Form 26AS or AIS If you have not received your income tax refund yet, it could also be due to a mismatch between the details submitted in your income tax return and the contents of your Annual Information Statement (AIS) and/or Form 26AS. What To Do: In case this is the reason for your income tax refund delay, you need to check the income tax refund status to know if the assessing officer requires any additional information to understand the mismatch. You may need to file a revised return or a rectification return if there are mistakes.

This should give you a clear idea of what you need to do in case you have not received your income tax refund. Also, now that you know how to check your income tax refund status online, you can monitor the progress of your ITR and know whether or not there is any undue delay in your refund. That said, to improve the chances of receiving your income tax refund sooner rather than later, ensure that you file your ITR early and avoid any mistakes in the return. Also, make sure that you provide the correct bank details — ideally, one that is active and linked to your PAN. This will minimise the probability of any income tax refund delay.Ready to make the most of your money? Start your tax planning journey now!