How To Get Income Tax Refund (TDS Refund)

Income tax refund refers to the fund given/returned to the taxpayer when the paid tax exceeds the actual liability (including interest). The paid amount could be in the form of TDS (Tax Deducted at Source), advance tax, self-assessment tax, foreign tax, etc.

As per the income tax and direct tax laws, a refund arises when an individual pays a tax that is greater than the actual chargeable amount.

The tax is calculated considering all the deductions and exemptions during the filing of ITR. The following formula would help you get a proper understanding of the calculation process.

Income tax refund = Total paid tax amount for the year (advance tax + TCS + TDS + self assessment tax) – payable tax for the year

Now that we know what income tax refund means, let us proceed into the next sections of how to get an income tax refund, regarding the eligibility, due date, and everything related to it.

Who is eligible for an income tax refund?

Knowing only how to get an ITR refund isn’t enough. Following is a list of instances that make you eligible for an income tax return.

If the paid tax in advance (on the basis of self-assessment) is greater than the tax liability as per the regular assessment.
If your TDS from interest on dividends, securities, or debentures is greater than the payable tax as per the regular tax. You must also know how to get a TDS refund.
If the charged tax on regular assessment gets decreased due to an error that occurred during the assessment process and ultimately was resolved.
If you have foreign assets (foreign bank accounts, financial properties, signing authority, financial assets, etc.), which must be reported in the ITR.
If you have investments that generate tax benefits and deductions and which are yet to be notified.

The eligibility for income tax refund includes another applicable case when you find that the payable tax is negative after evaluating the taxes you paid and deductions you are granted.

When can you claim an income tax refund?

If you have paid excess tax than your actual tax liability, you can claim it during that particular fiscal year. 2021-22 is the Assessment Year (AY) of the income earned in the FY of 2020-21. The AY follows the FY.

How to claim an income tax refund?

If you have filed for an income tax refund following the right procedure, the Income Tax Department will automatically start the refunding process as per your eligibility. However, if you are a first-time applicant, the following process would be a great help. The same process is the answer to the question regarding how to get a TDS refund online.

Log in to the official website of the IT Department.
Make a registration with the PAN card, which you can later use as your user ID.
Move to the ‘Download’ tab and select the Assessment Year along with the ITR form from there.
Open the downloaded excel sheet and provide all the essential information demanded in Form 16.
If you have paid more tax than your tax liability, the excess amount would automatically be calculated and shown under the 'Refund' column of the ITR form.
Verify all the details and confirm them. After which, an XML file will be created and saved on your device. How much time income tax refund takes will depend on whether you filled this form correctly.
Select the 'Submit Refund' and upload the XML file on the online tax portal.

After the successful filing of ITR, you need to e-verify the ITR. To ensure you get the refund, e-verify your returns; otherwise, the process will remain incomplete.

Please note that the refund amount displayed on the ITR form is solely based on the data provided by you. The IT Department will separately conduct a verification process of the documents submitted by you and then calculate the amount of refund. Here, the actual refund amount may differ from the amount shown on the ITR form.

How is the payment of income tax refund made?

Below is mentioned the payment method of income tax refund through one of which you will get your share.

The direct transfer of the refund amount to the taxpayer's account.
Refund via cheque.

Let's discuss how the whole process works

The direct transfer of the refund amount to the taxpayer's account: This is the most common method of refunding excess tax paid by the taxpayers. Here, the transactions are made through the NECS/RTGS

Taxpayers must ensure that the provided data in the ITR form related to the applicant's bank account are correct. If the details are furnished properly, then one can expect a quick refund directly to the bank account.

Refund via cheque: Another method through which the income tax refund payment is made is through cheque. The IT Department usually follows this method if the provided bank account details are incomplete or wrong.

Here, the authorities issue a cheque to the given bank account number in the ITR form. Individuals can track the cheque status by contacting the speed post. For that, you need to keep handy the reference number provided by the IT Department.

What is the due date to claim an income tax refund?

The income tax calendar follows a different process where each date is important. Therefore, taxpayers must be careful about the due dates of filing income tax returns. Since the due dates vary with the category of taxpayers, the following table will help individuals to identify the due date of ITR.

Category of Taxpayer	The Due Date for Filing ITR (For FY 2020-21)
Individual/HUF/AOP/BOI	31st July 2021
Businesses (Demanding audit)	31ST October 2021
Businesses (Demanding TP report)	30th November 2021

As per the Income Tax Act, an individual is required to claim his/her return in that respective fiscal year by 31st July. The date remains the same unless the deadline is extended.

How do I check income tax refund status?

Individuals can check income tax refunds through two portals. These are-

E-filing website
TIN/NSDL website

We will discuss each tracking process separately.

Checking income tax refund status through the e-filing website

You can easily check your income tax refund status by following the steps mentioned below.

Step-1- Visit the official website for e-filing and click on the 'ITR Status' button.
Step-2- Enter details like PAN, acknowledgement number, Captcha code in the relevant box.
Step-3- Click on the 'Submit' button.
Step-4- The income tax refund details will be shown on the screen.

Checking income tax refund status through the TIN/NSDL website

National Securities Depository Limited is the governing body of the Tax Information Network (TIN) on behalf of the IT Department of India. TIN serves as the database of nationwide tax-related information.

Following is discussed the steps to check income tax refund status through the TIN/NSDL website.

Step-1 – Visit the official website of TIN.
Step-2- Click on the 'Income Tax Refund Status.'
Step-3- Provide the PAN, select the Assessment Year from the drop-down menu.
Step-4- Verify the Captcha code.
Step-5- Click on the 'Submit' button.

Now you can see the income tax refund status.

If the authority has already processed the refund, you will receive a message mentioning a reference number, the mode of payment, date of refund, and status.

Depending on the various situations and cases, the income tax refund status shows different results. We have listed down all the different statuses along with their meaning so that new taxpayers can easily decipher the meaning.

What are the different types of status of income tax refunds?

Here is a list of different statuses that taxpayers might get to see.

Brand Name	Price
Different Types of Status	Meaning
Not determined	This indicates the refund has not been processed yet. Therefore, you need to check your current income tax status.
Refund failed	Indicates that the refund could not be transferred to the taxpayer’s account due to incorrect bank details.
Refund paid	Indicates that the respective taxpayer is eligible for refund and the amount has been transferred to the given bank account number or through cheque.
Refund returned	This indicates that the income tax refund has been returned. Hence, an individual has to request the IT Department to re-initiate the process as the refund will be cancelled.
The cheque has been cashed	Indicates that the cheque issued addressing an individual’s name has been received and cashed.
Refund expired	Indicates that the cheque issued against an individual's name has not been cashed within 30 days from the date of issue (mentioned on the top right corner). In such cases, individuals have to avail another cheque issued against their name.
Refund adjusted against last year’s outstanding demand	This indicates that the outstanding income tax amount from the previous Assessment Year will be adjusted to the new expected income tax refund from the ongoing Assessment Year. However, the authority informs the taxpayer before adjusting the same.

How much time does it take for an ITR refund?

Income tax refunds are usually issued within 24-45 days after the processing of ITR. However, if refunds delay beyond such times, individuals must enquire about the same with the IT Department. That is the simplest way to learn how much time it takes for an income tax refund.

Be it a salaried person or self-employed, every individual must have heard the term income tax refund. Though every year individuals file for income tax returns, we hardly bother about how the whole claiming process of ITR works.

But with these detailed discussions on the ITR claiming process, eligibility, due date, filing for income tax refund would not be a challenge anymore. Now that you know how much time it takes for a refund of income tax, start filing your application.

Read and re-read the sections mentioned above and claim your hard-earned money (ITR) before the deadline!

Frequently Asked Questions

All

Can I avail interest on late claims refund?

No, you cannot get interest in a refund of late claims.

Is income tax refund considered upon the completion of six successive Assessment Years?

An income tax refund is not considered upon the completion of six successive Assessment Years.

Does the refund amount for a single Assessment Year have any upper limit?

Yes, the refund amount for a single Assessment Year has an upper limit which should be less than Rs.50 lakhs.