What to Do In case of Delay in TDS Refund

What to Do In case of Delay in TDS Refund?

29 Oct 2021 Admin Tax4wealth 0

Interest on TDS Refund

According to the provisions under Section 200A of the Income Tax Act, if the Income Tax Department delays or is late in paying the refund tax amount, then the taxpayer is entitled to get a simple interest of 6% per annum on the specified refund amount.

The aforesaid interest will start accruing from beginning of the financial year i.e. 1st April. However, the said interest is not if the refund tax amount is less than 10 % of the total payable tax in a particular financial year. Apart from that the interest earned on the refund tax amount will also be taxable as the same will be considered as income under the head "Income from Other Sources".

What to do if you have not received the refund yet?

In case a taxpayer has not received the tax refund within the stipulated time. Then, he can follow the below mentioned steps to know the status of TDS refund;

Step 1: Go to the official website of the income tax filling and login to the account by providing details of login ID, Password and date of birth or date of incorporation.

Step 2: After logging into the account, click on the option ‘View e-filed Returns/Forms’ tab and select the relevant option from the drop down list i.e. ‘Income Tax Returns’ and then click on the button "submit".

Step 3: Then click on the acknowledgement number for the specified assessment year for which one wants to check the refund status. For example, if one wants to know the refund status of the financial year 2016-17 then click on the acknowledgment number of the assessment year 2017-18.

Step 4: The status of the TDS return will be shown in the screen on a new window containing information including the mode of payment, assessment year and reason for failure of refund if any.

It is to be noted that the taxpayer can also login to the website of NSDL-TIN to check the income tax refund. The link to check the refund status is https://tin.tin.nsdl.com/oltas/refundstatuslogin.html.

The status of refund will be displayed once entering the assessment year, PAN and CAPTCHA code in the above-mentioned link.

How to file complaint for a delay in Income Tax or TDS refund

There are many reasons that although after application of income tax return or TDS return, a taxpayer may not received the refund on time or there will be delay in receipt of the refund amount. In that case, a taxpayer can file a dispute to the Income Tax Officer. The Income Tax Officer can be contacted with all the relevant and necessary documents. In case, a taxpayer does not receive a satisfactory response on the matter, then he can contact the Income Tax Ombudsman with the below mentioned details;

Form 16
Permanent Account Number (PAN)
Bank Statement
All the documents related to earnings and investments
TDS certificates issued by Bank

Reasons for non Refund and Action Plan for Refund

There may be several reasons due to which the refunds are not being credited to the taxpayer's bank account. A table containing the reason whereof and the action plan required to tackle such situation is provided below;

Reasons for Non Refund	Action Plan
Income tax department requires some additional documents for processing the refund request	Immediately contact the Assessing officer via email, post or telephone and submit the required documents as requested. Once, the documents are submitted get the acknowledgement of the said submission of documents.
The refund has been rejected and according to the Income Tax Department, the taxpayer actually owes taxes to be paid to the IT department.	The taxpayer may receive a notice from the Income Tax Department stating the amount of tax that the taxpayer owes to them. In such case, check all the documents carefully once again and re compute the tax liability and refund receivable. If the amounts and details filled in the income tax return are correct then file a rectification supporting the claim for correctness of documents. In case the returns filed found to be incorrect then the taxpayer has to pay the outstanding taxes as demanded by the Income Tax Department within the stipulated time as specified in the notice sent by the IT department.
If the refund status appears to be incorrect according to the examination of the Income tax Department. Then the refund will be rejected.	If the refund status appears to be incorrect according to the examination of the Income tax Department, a notice will be issued with explanation of its incorrectness. Although, the taxpayer receive such notice, he can still file for a rectification supporting his claim for correctness of refund file.
Forgetting to get deduction which the taxpayer is eligible for	If the Income tax department is yet to start to process of the return, then the taxpayer can revise the returns and add the missing items such as deduction that he is eligible for.
The bank details provided to the Income Tax Department while filing the return has been changed.	If the bank account details have been changed, inform the same to the Assessing Officer with new or latest Bank Account Number along with MICR and IFSC code. Accordingly, the Assessing Officer will inform the same to bank and request to update the details in fund transfer process.
Refund requests are processed under 2 levels. Thus, the delay can also be divided under the following 2 levels: 1. The Income tax Department is consuming much time for processing the refund request. 2. The Income tax department has already started processing or processed the refund but the delay is happening at the end of the bank.	1. Ensure to send the ITR-V within the stipulated time i.e. 120 days from the date of e-filing. 2. In such case, file the revise returns and send the acknowledgment to CPC, Bengaluru.
If the filing is done in physical form and not e-filled (Online Filing).	The processing of physical forms make take longer time as compared to online filing. In such case, wait for the reconciliation of paperwork by the Income tax Department.