A 'tax refund' arises when a taxpayer pays ‘excess tax’ before filing his income tax return. The refund arises as a taxpayer makes advance payment of tax during the year by way of TDS, TCS or advance tax, whereas his actual tax liability is calculated at the year-end. Any deficit in the liability is met by paying the self-assessment tax at the time of filing of return. In an inverse situation, the excess taxes paid by a taxpayer is refunded to the taxpayer only when he files his income tax return.
When a return is filed, the taxpayer has to ensure that it is duly verified either by submitting an Aadhaar-based OTP, EVC or a signed copy of ITR-V to the Centralised Processing Centre (CPC), Bengaluru, within 120 days of filing the return. After verification of ITR, the Income Tax Department processes the ITR and releases the tax refund to the taxpayer by sending an intimation under Section 143(1) of the Income-Tax Act.
If the ITR is processed by the I-T Department but still the tax refund is not credited in the bank account, then it might be possible that the taxpayer has not fulfilled the new requirement.
Till last year, the Income Tax Department was issuing tax refunds either in the form of cheque or credit to the bank accounts of the taxpayers. However, the government has now changed the norms, and w.e.f. 01-03-2019, tax refunds will be issued only in the form of credit in the bank accounts of taxpayers. Further, in order to get the tax refund, it is mandatory for a taxpayer to link his bank account with PAN and pre-validate such bank account on the e-filing portal.
The Income Tax Department used the social media platform to inform the taxpayers that it is mandatory to link PAN with a bank account to get the income tax refund directly, swiftly and securely in the bank account. The official Twitter handle of the Income Tax Department, on 26-02-2019, had twitted a photo in which it was clarified that the department will only issue e-refunds directly to bank accounts which are linked with PAN. In order to check whether the bank account is linked with PAN or not, taxpayers are advised to 'Pre-validate' their bank account by visiting the e-filing portal. If the bank account isn't linked with PAN, then taxpayers are requested to submit their PAN details with the bank.
Apart from linking the bank account with PAN, taxpayers are also required to pre-validate the bank account on the e-filing portal of dept.
How to pre-validate Bank account?
In order to pre-validate a bank account, taxpayers are required to access 'pre-validate your Bank Account' tab available under 'Profile Settings' on thd e-filing portal and enter details of their bank account such as bank name, account type, account number, IFSC code and mobile number linked to that bank account.
The steps to pre-validate the bank account are given below:
Step 1: Login to e-filing portal https://www.incometaxindiaefiling.gov.in/home
Step 2: Go to profile setting and click on 'Pre-validate Your Bank Account'
Step 3: Taxpayer will get the details of Pre-validated bank and to pre-validate more accounts, one can click on 'Add" button.
Step 4: Taxpayer shall be required to furnish details like Bank account number, IFSC, Bank Name, Account type and mobile number in the mandatory fields and click on 'Pre-validate'
If the details furnished by the taxpayer is matched with the records as per bank, the pre-validation process gets confirmed.
Taxpayer can validate multiple bank accounts on e-filing portal and can select any one of them in ITR for tax refund.
Alternatively, pre-validation of a bank account can also be done by login through the net banking. In case a taxpayer accesses e-Filing portal through net banking, the bank account details provided by bank will be added under the pre-validated bank account details of e-Filing portal account upon confirmation by the taxpayer.
(By CA Rahul Singh, Manager, Taxmann.com)