What is an income tax refund?
Reviewed by Ranga & Company
Income tax refund: An income tax refund is money the Income Tax Department returns when the tax you paid through TDS, TCS or advance tax is more than the tax you actually owe for the year.
At a glance
- How to claim
- Through your income tax return; no separate application
- Paid to
- A pre-validated bank account linked to your PAN
- Interest
- 0.5% a month under section 244A (taxable)
- Track at
- incometax.gov.in → View filed returns
Why refunds happen
- Your employer deducted more TDS than needed, for example before you declared investments
- Banks deducted TDS on FD interest though your total income is low
- You paid more advance tax than your final liability
Why refunds get delayed
- The return is not e-verified
- The bank account is not pre-validated or the PAN is inoperative
- Income in your return doesn't match AIS or Form 26AS
- The department proposes to adjust it against an older demand under section 245
Common mistakes
- Not pre-validating a new bank account before filing
- Ignoring a section 245 intimation, which lets the adjustment go through
Frequently asked questions
Why is my income tax refund delayed?
Common reasons are an unverified return, a bank account that isn't pre-validated, a mismatch with AIS or Form 26AS, or a proposed adjustment against an older demand.
Is the interest on a tax refund taxable?
Yes. Interest on an income tax refund is taxable as income from other sources in the year you receive it.
How long does a refund take?
Many refunds arrive within a few weeks of e-verification, but processing checks and mismatches can stretch it to months.
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