I Filed My 2022 Taxes. When Will I Get My Refund?

Editor,  Contributor

Updated: Jun 27, 2023, 9:45pm

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Most people consider filing of tax returns to be the final process and to not keep track of the subsequent processing of the tax return by the tax authorities. The entire tax return filing and processing has been substantially digitized which makes it easier to check the status of tax returns on-line. 

Once the tax return is filed, the income tax authorities (central processing centre) would review the tax information provided by the taxpayer and process the tax return after examining its accuracy and compliance with the tax laws. 

Accordingly, an intimation is issued to the taxpayer on processing of tax return, containing adjustments made to the taxable income or taxes paid, if any and intimating the resulting tax demand or refund. Notably, as per the Central Board of Direct Taxes (CBDT) press release dated April 3, 2023, refunds of INR 3,07,352 cr have been issued in FY 2022-23 showing an increase of 37.42% over the refunds of INR 2,23,658 cr issued in FY 2021-22.

It is vital for the tax filers to review the assessment of demand or refund determination in order to ensure accuracy and address any discrepancies or issues that may arise. As such, the steps to be taken in this respect such as tracking of any notices, tax demands, making timely payment of the tax demands where due, confirming the accuracy of refund amounts issued by the department etc. are discussed in this article.  

Track Intimation of Tax Refund

What is intimation under Section 143(1)?

Intimation under Section 143(1) of the IT Act is not in the nature of notice but a communication which is sent by the revenue authorities to the taxpayers. For the purpose of generating such intimation, processing of the tax return takes place wherein the information provided in the tax return is verified for its accuracy such as any arithmetical error, incorrect claim in the return, etc. and accordingly, the tax demand or tax refund is computed. 

Such intimation is issued within nine months (in fact even much shorter time observed in the past one year) from the end of the financial year in which the tax return is filed.

How to obtain such intimation under Section 143(1)?

Such intimation is generally mailed to the taxpayers by the centralised processing centre (CPC) on their email ids registered on the income tax portal as well as communicated to the taxpayer on the registered mobile number entered while furnishing the tax return. The taxpayers may also download the said intimation from the Income tax portal as follows:

  • Login to the e-filing income tax portal using the valid credentials.
  • In the e-file option on the dashboard, select Income tax returns > view filed returns.
  • Click on view details for the relevant assessment year.
  • Download intimation order under Section 143(1).

Reasons for Adjustments in the Tax Return Furnished 

The following are the causes generally observed for adjustments made by the revenue authorities:

  • Tax deducted at source (TDS)/tax collected at source (TCS) mismatch 

The taxpayer may have claimed an amount of tax deducted at source (TDS) or tax collected at source (TCS) in his tax return which would be different from that as mentioned in their Form 26AS. This may occur due to various reasons such as error on the part of the deductor in computing the TDS or filing the TDS return, the taxpayer claiming TDS/TCS belonging to any previous or subsequent year other than the relevant financial year, etc.    

  • Adjustment on account of special tax rates

Taxpayers deriving certain income taxable at special rates such as capital gains may fail to disclose the same separately and subject the same to special tax rate. For instance, short term capital gains from listed equity shares would be subject to tax at 15% under Section 111A of the IT Act whereas long term capital gains from listed equity shares exceeding INR  1,00,000 would be subject to tax at 10% without indexation benefit under Section 112A of the IT Act. 

In case the taxpayers fail to disclose the special rate income separately, the same may result in adjustments in the intimation.

  • Variation in transaction amount as per Form 26AS/annual information statement (AIS)/tax information summary (TIS)  

At times, the amount as mentioned by the taxpayers in the tax return may vary from the amount as mentioned in the records available with the tax department such as Form 26AS, AIS and TIS. 

Such differences may be due to the taxpayer failing to report certain income or reporting of incorrect information. In such cases, adjustments may be made by the revenue in accordance with the information available with them.

  • Applicability of interest under Section 234A, 234B and 234C in case income assessed is more than the returned income

Interest under Section 234A, 234B and 234C of the IT Act deals with interest levied for delay in filing the return of income, non-payment or short payment of advance tax and non-payment or short payment of individual instalment or instalments of advance tax (i.e. deferment of advance tax) respectively. 

In case if the assessed income is more than the returned income due to variation of transaction amount as per AIS or incorrect disclosure of information, etc there will be additional levy of interest under section 234A, 234B and 234C of the IT Act.

Response to Intimation of Tax Refund

Such intimation provides a preliminary assessment of tax information to the taxpayer regarding the income, deductions, exemptions, interest, tax liability, etc. as per the tax return filed by the taxpayer as well as the amount computed by the revenue authorities. 

Thus, the taxpayers can analyse such comparative information for the purpose of understanding any discrepancy in the nature of adjustments or disallowances made by the revenue authorities. 

In case the taxpayer agrees to such adjustments made by the revenue, no further action is required to be taken except for payment of demand, if any. 

The outcome of the intimation can result in the following:

  • No adjustment in the tax return furnished 
  • Adjustment in the tax return furnished

An analysis on the action to be taken by the taxpayer in each of the above cases is discussed below.

No adjustment in the tax return furnished

In such a case, no adjustment is made from the revenue’s side and accordingly the tax return furnished by the taxpayer is considered to be final. The taxpayer is not required to carry out any action/ process in this regard.

Adjustment in the tax return furnished

In such cases, the taxpayer might need to analyse the reason for adjustment made and either accept the same or proceed for rectification. Rectification can be done by any of the below options:

  • Reprocess the return – This option can be selected when the taxpayer believes that information furnished in the tax return is correct and only reprocessing of return is required for rectification.
  • Return data correction – This option can be selected when the taxpayer has made any disclosure error and the same needs to be corrected by filing a rectified return through uploading the JSON or xml utility.
  • Tax credit mismatch correction – This option can be selected when income related information is correct but the taxpayer has made any error in inputting the information with regards to TDS credit or tax paid details.

The above rectification request can be placed by logging into the income tax website, selecting Services tab > Rectification > New Request > Income-tax > Select AY > Select 1 of above options.

Determination of Income Tax Demand

Any demand generated on account of interest and/or tax after making adjustments by the revenue in accordance with Section 143(1) of the IT Act would constitute outstanding demand payable by the taxpayer.

How to respond to outstanding tax demand?

In case where an outstanding demand is generated by the revenue, the taxpayer may or may not agree with such outstanding demand and accordingly respond to such demand as follows: 

  • Log in to the e-filing Income tax portal with valid login credentials.
  • On the dashboard, click on Pending Actions and select “Response to Outstanding Demand” to view a list of your outstanding demands. If the taxpayer wishes to pay the demand, click on “Pay Now” on pending actions to pay a demand and the taxpayer would be redirected to the e-pay tax page from where such tax payment can be made.
  • On the response to “Outstanding Amount” page, click on “Submit Response” to submit a response to an outstanding demand.

Further process for such response depends upon whether the taxpayer agrees to such demand raised by the revenue as follows:

  • After submission of the above, click on “Confirm” to confirm your submission.
  • On successful submission, a success message is displayed along with a transaction ID of which the taxpayers should make a note for any future reference.

*Note: The reason for disagreement may constitute any of the following:

  • Demand paid and challan has CIN (without open challan details).
  • Demand paid and challan has CIN (with open challan details)
  • Demand paid and challan has no CIN.
  • Demand already reduced by rectification/revision/appellate order.
  • Demand already reduced by Appellate order but appeal effect to the given.
  • Appeal has been filed: Stay petition filed.
  • Appeal has been filed: Stay granted.
  • Appeal has been filed: Instalment granted.
  • Rectification/ Revised Return filed at CPC.
  • Rectification filed with AO.
  • Other than above.

However, in case where the taxpayer disagrees with the adjustments made by the revenue, they may either opt for rectification under Section 154 of the IT Act or can even file for an appeal under Section 246A of the IT Act before the Commissioner of Income Tax (Appeals) as intimation under Section 143(1) is an appealable order.

Determination of Refund

What is income tax refund

Income Tax Refund is the excess of tax paid as against the tax liability of the assessee issued by the tax department after filing of ITR. The estimation of tax refund is reflected through the Income Tax Return filed by the taxpayer for each year and the refund is only initiated by the department once the same is processed/verified. 

Reasons for income tax refund 

Generally, refund is initiated on excess payment of tax which could be for various reasons such as: 

  • The sum of advance tax/self-assessment tax payments are in excess the actual tax liabilities for the financial year
  • The claim of TDS/TCS exceeds the final tax liability 
  • Tax relief claimed on Foreign Income with countries having Double Taxation Avoidance Agreement (DTAA) with India

Some of the prerequisites for availing income tax refund are

  • Filing of return on e-filing portal: The tax return has to be filed every year within the applicable due date (July 31 for individual taxpayers where audit is not applicable and Oct. 31 in audit cases). Certain deductions and exemptions are not allowed in case of belated return and accordingly, the refund in such cases would be reduced to such extent. 
  • E-verification and processing of return: The return of income has to be e-verified and processed following which refund, if any, shall be initiated.
  • Furnishing of valid bank account details: Bank account details need to be appropriately provided and pre-validated while furnishing the tax return. 

Cases where refund cannot be issued

In certain cases, some of the indicative cases where the refund cannot be issued are as follows:

  • Tax return has not been e-verified or the ITR-V (acknowledgement) is not sent to CPC, Bengaluru within 30 days from the date of filing of return.
  • Income tax return has not been processed or after processing there is no refund as verified by the department. Generally, the intimation under Section 143(1) issued by the Income Tax Department indicates whether or not refund will be issued to the taxpayer. 
  • The refund is not credited on account of not pre-validating the bank account details.
  • The refund payable to the taxpayer may be set off against any amount that remains payable against the same assessee under the IT Act. The taxpayer would be received an intimation under Section 245 in regard to such adjustment of refund against demand and accordingly, the taxpayer would be required to respond to such outstanding demand. 

Check Status of Income Tax Refund 

The Income Tax Refund status can be verified online via NSDL site or through e-filing portal of the assessee. 

  1. The TIN NSDL Portal
  2. The Income Tax E-filing Portal
  • How to Check Income Tax Refund Status through TIN NSDL Website? 

In order to verify the refund status from the via TIN NSDL Website, the following steps would be followed:

Step 1 – 
Visit the official website of TIN NSDL https://tin.tin.nsdl.com/oltas/refundstatuslogin.html

Step 2 – 
Enter the valid PAN of the taxpayer whose refund is to be tracked and provide the relevant Assessment Year (AY) of the refund.

Step 3 – 
Enter valid CAPTCHA and proceed. A screen will appear reflecting the refund status (whether paid or adjusted against any demand) of the PAN for the relevant year.  

  • How to Check Income Tax Refund Status through E-filing Income Tax portal? 

The taxpayers also have an option to verify the status of the tax refund from the e-filing Income tax portal as follows: 

Step 1
Login into the e-filing Income tax portal using valid credentials. 

Step 2
From the Dashboard, click on the e-file option and select “View Filed Returns” from the option income tax return.

Step 3
Click on the relevant assessment year of which refund status needs to be checked and click “View Details” to get the details of refund issued and paid to the taxpayer.

Step 4
On clicking the View details tab, the status of the refund will be reflected (such as refund paid, refund sent to the banker, processed with refund due etc).

Interest on Income Tax Refund

The taxpayer would be liable to receive an interest @ 0.5% per month or part of the month on the amount of refund from 1st day of April of the relevant assessment year (in case return filed up to due date under Section 139) or from the date of filing the tax return (in case return is filed after due date) till the date of granting of such refund. 

However, such refund corresponds to the self-assessment tax under Section 140A of the IT Act, such interest would be computed from the date of filing the tax return or the date of payment of taxes, whichever is later.

Bottom Line

Taxpayers should continuously monitor if there are any demands raised or refunds issued by the tax department. Accordingly, any demands raised should be paid or appropriate response needs to be provided to any outstanding demand within the time specified as causing any delay in the same may result in interest consequences for the taxpayer. 

Further, the taxpayer needs to ensure that appropriate refunds are granted along with any interest on the same.  

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