At Chhota CFO, we offer expert income tax refund services in Bangalore to assist individuals and businesses in claiming and processing their income tax refunds efficiently. Our dedicated team of tax professionals is committed to providing personalized assistance and ensuring that our clients receive their refunds promptly and accurately. Our tax consultants possess specialized knowledge and experience in income tax laws and regulations in India, allowing us to navigate complex refund processes with precision. We have a successful track record of assisting numerous clients in Bangalore with securing their income tax refunds, ensuring maximum refunds and minimal delays.

1. What is Income Tax Refund?

An income tax refund is a reimbursement of excess taxes paid to the government. If you have paid more taxes than your actual liability, you can claim a refund, which is calculated as the difference between the taxes paid (Advance Tax, TDS, TCS, Self-Assessment Tax) and your total tax liability for the year.

Following are the potential reasons behind the delay in getting your income tax refund:

• In the event of your refund request being rejected, it is important to take appropriate actions to address the situation. Firstly, carefully review all your documents and recalibrate the tax liability and refund amount claimed. Upon discovering that the figures you ended up filing in the returns form are accurate, you should proceed to file a rectification return under Section 139(4) to support your claim for the refund.
• It is not uncommon to overlook eligible deductions when filing an income tax return. This oversight can result in missed opportunities to reduce taxable income and potentially receive a higher tax refund. If you realize that you have forgotten to include a deduction you are eligible for and the Income Tax Department has not yet processed your returns, you can proactively revise your income tax return.
• If you have recently made changes to your bank account details after filing your income tax returns, it is essential to ensure that your refund can still be credited to the correct account. In case you encounter any issues where the refund could not be credited to your bank account, there are steps you can take to resolve the situation.

How to Get a Refund of Excess Income Tax Paid?

To receive your income tax refund, you must file your Income Tax Return (ITR) and provide accurate information about your income, deductions, and tax payments. It’s important to file your ITR online to claim your refund.

How Long Will It Take to Get the Refund?

The time required to receive your income tax refund varies depending on the internal processes of the Income Tax Department. On average, it takes around 90 days, but a new refund processing system implemented in February 2021 aims to expedite the process, with an expected turnaround of just a few days.

 How will I Receive the Refund?

The Income Tax Department disburses refunds through electronic transfers (direct credit) or by issuing a refund cheque. To ensure a smooth refund process, make sure to provide accurate bank account details when filing your return. Refund cheques are dispatched via speed post to the address specified in your ITR.

How is the Interest on Income Tax Refund Calculated?

When your refund amount exceeds 10% of the total tax payable for the year, you may be eligible for simple interest on the refund. The interest is calculated at a rate of 0.5% per month, starting from the beginning of the next financial year until the refund date.

Is the Income Tax Refund Taxable?

The refund amount itself is not taxable. However, any interest received on the tax refund is subject to taxation at your applicable income tax slab rate.

What does it mean to receive an income tax refund?

 An income tax refund refers to the reimbursement of excess taxes paid to the government.

Are income tax refunds subject to taxation?

 No, income tax refunds are generally not taxable since they represent a return of your own funds that were overpaid to the government.

When is the deadline to file the Income Tax Return (ITR) for the assessment year 2023-24 without incurring a late fee?

The due date for filing the Income Tax Return (ITR) for the assessment year 2023-24, based on the financial year 2022-23, is 31st July 2023, and no late fee will get charged if filed within this deadline.

How to Claim an Income Tax Refund?

The government now utilize e-transfer facility to process income tax refund. Hence, one can claim a refund by filing the ITR for a specific financial year. It is crucial to ensure that the ITR should be verified electronically via OTP or physically by posting signed ITR-V [2] to the Centralized Processing Centre (CPC) within 120 days of filing the ITR. Also, the excess tax paid must be reflected in Form 26AS.

Is it Mandatory to file Income Tax Return to Process the Refund?

If a taxpayer wants to claim income tax refund to get back the excess tax paid in a financial year, filing the Income Tax Return (ITR) is mandatory. Failing to file the ITR in the applicable assessment year will prevent you from getting a tax refund.