You must have filed your income tax return while considering the amount of tax deducted at source from your recipients or the advance tax-paid by yourself on his estimated incomes after claiming all deductions and exemptions. Whilst, you may become entitled to claim refund of income tax, if such tax deducted or paid exceeds the actual income tax liability for the relevant assessment year. In such case, you would be granting of refund of excess tax paid or deducted and entitled to get interest thereon, thanks to Section 237 of the Income Tax Act. You may also become entitled to refund of income-tax as a result of any order passed in appeal, rectification or revision, when the assessed taxable income has been reduced and you had paid excess tax earlier. However, remember that your claim for regular refund should be bona fide and made within stipulated period. If you do not want to wait for a long time to get a tax refund or give no opportunity to reject the claim, while complying with the provisions of claiming for refund of tax, you have had full fundamental rights to get the refund from the Income tax department.

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Time Limit for claiming Tax Refund

Section 239 of the Income tax Act has prescribed the time limit to claim the income tax refund; it should be made within the end of one year from the last day of the assessment year, for which such refund is claimed. Sample this, for tax paid or deducted during the financial year 2012-13, the relevant Assessment year is 2013-14. Accordingly, the claim for income tax refund in this regard must be filed along with the Income tax Return latest by 31st March 2015. However, you can claim your tax refund even in your belated return, after the expiry of the statuary limit prescribed as above, the assessing officer may admit the belated refund claim, if the refund arises as result of excess TDS or Advance tax and the amount of refund does not exceed Rs 1.00 lakh for any assessment year. It has also been clarified that a belated claim for refund can also be entertained in case where the return income is a loss.

Supplementary Refund Claims

It may often happen that you are not able to claim credit for TDS of the time of filing your Income-tax return, since the relevant TDS certificate may not have been received in time or you miss to claim credit for the same through oversight. In such case, credit for the relevant TDS would be allowed you an opportunity to file a supplementary claim for refund subject to the application for rectification supporting the claim for such TDS credit must be made within two years from the end of the relevant assessment year to which the TDS pertains, along with the attachment of the relevant TDS certificates. While filing supplementary return, you should also adherence that the income from which such TDS has been made should have been disclosed in the return of income for the relevant assessment year.

No previous adjustments against your Tax refund

Many a times taxpayers are not received or received in partial of claimed refund in their return because the Income Tax Department might be raised tax demands outstanding against them for an earlier assessment years in which taxpayers require get an advance intimation and opportunity of hearing and such intimation was not made to the tax payer earlier under section 245. In that case, an assessing officer cannot adjust a demand outstanding for an earlier assessment year against the amount of refund due to the taxpayer, without following the procedure prescribed under section 245 as stated above and if such an unlawful adjustment is made the same is required to be set aside. Moreover, there is no provision of appeal against the set-off order under section 245.

Time Limit for getting the claimed refund

And here is a piece of some great news for taxpayers as your assessing officer must be sent an intimation along with refund, if any to the taxpayer, latest by the end of one year from the end of the financial year in which the return is filed. Accordingly where the refund claimed by a taxpayer is not granted by the Assessing Officer within this period, the taxpayer can escalate the matter either with the Assessing Officer or the higher authority. If you are being annoyed by the delay in getting your refund, rectification or appeal effect order in time or you are even getting irritated by the lack of transparency in identifying your case for scrutiny or you are upset over harassment, rude behavior or non adherence of the prescribed working hours by the Income-tax Officials, you do not need to feel helpless or take it down lying low. You now have had an independent Watchdog whom you can approach for seeking effective resolution of your grievance in the relation to income tax refund or interest thereon with the Grievance Cell of the Income-tax Department, which functions directly under the office of the Chief Commissioner of the Income tax, where you can also obtain a token compensation of Rs 1,000 for the loss suffered by you.

Interest on Income-tax Refund

In case of refund is payable to any taxpayer, he is also entitled to get interest thereon @ 0.5% for every month or part of the month i.e. 6% per annum from the first day of April of the assessment year to the date on which the refund is granted, where the refund arises on account of TDS or advance tax-tax payment. In other cases, such interest is calculated from the date of payment of tax or penalty to the date on which refund is granted. It must be noted here that no interest is payable if the amount of refund is less than 10% of the tax payable by the taxpayer. It also needs to be noted that for the purpose of computing the interest, even part of a month is to be treated as a full month. In case of non-granting of interest or incorrect interest working is find, the taxpayer should make an application for rectification under section 154 of the Income tax Act or in appropriate cases move the Commissioner of the Income-tax by a petition under section 264 of the Income tax Act.

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Suresh Kumar Narula

SEBI Investment Advisor, Founder & Principal Financial Planner at Prudent Financial Planners
Suresh K Narula is founder and Principal Financial Planner at Prudent Financial Planners. He has earned the professional CERITIFIED FINANCIAL PLANNER and got registered with SEBI as Investment Advisor. He writes on personal and financial planning articles and got published in Dainik Bhaskar, Business Bhaskar and The Financial Planner's Guild, India. He is also a member of Financial Planner's Guild India ( An association of practicing SEBI registered Investment advisers) to create awareness about Financial Planning in general public, promote professional excellence and ensure high quality practice standards. Suresh received his an M.com from Himachal Pardesh University and an MFC from Punjab University, Chandigarh. He can be reached at info@prudentfp.in
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