Towards the end of the financial year, most of us are dogged with the thoughts about filing investment declaration, filing tax returns and basically save as much money as possible from being deducted as tax.
Once the formalities are completed, we think little about any tax refunds. Tax refunds are something that a few of us might get and a few of us might not. To be prepared it is prudent to know some basic information about tax refunds.
What is a Tax refund?
A tax refund or tax rebate is a refund on taxes when the tax liability or the amount of tax to be paid is less than the amount of taxes paid by the individual.
However, you can also claim a tax refund in case the taxes were deducted because you did not declare your investments which could have some of the taxes that you paid.
For salaried individuals, it is possible that that the company deducted excess tax because you did not declare any of your investments to the company. In such a case, a tax refund may be helpful.
How do I apply for a tax refund?
To see whether you are eligible for a tax refund, you need to file your tax returns or check the Form-16 that you receive from your employer if you are a salaried individual.
How do I get the tax refund?
The tax return will show the amount of refund (if any). In case if the tax return already shows that you are getting a tax refund you need not apply for it. The tax return cheque directly comes to the address mentioned on the Return of Income document filed with the Income Tax department.
Tax return can also be debited directly to your bank account which needs to be mentioned on the tax return.
In a situation where you think that you forgot or did not have the proper documents to show the investments made, a Revised Return of Income needs to be submitted. Also, the actual claim for the tax refund needs to be done using Form 30.
The Income tax department has recently started an initiative where you can check your tax return status online.
When can I claim for a tax refund?
Tax refund needs to be claimed with one year of the last day of assessment year.
What to do if I do not receive the tax refund?
If you do not receive your tax refund within a reasonable time (may vary from case to case) which normally is within a maximum of one year from the date of filing the tax return, you can either visit the tax department’s office for the follow up of the refund or you can write a letter (along with the copy of acknowledgement of the tax return) to the concerned Income Tax Assessing Officer.
If it is still not redressed then you may write a letter to the jurisdictional Chief Commissioner of the Income Tax with a copy to the Grievance Cell and the concerned Income Tax Officer.
This letter may be accompanied by the copies of previous letter/s written to the Income Tax Assessing Officer and a copy of the tax return filed.
How can I plan my taxes so that I get my tax refund faster?
If you do not want to wait for a long time to get your tax refund, you need to make sure that you do tax planning as early as possible. You need to assess your tax liability and if need be, take additional help from a tax expert.
You also need to invest or save expense bills according to the assessment of your tax liability. Finally, if you are a salaried individual, you need to declare your investments to your employer so that they can deduct the correct amount of tax from your salary.
In conclusion, it is important that you keep track of any refunds you are eligible for, since there have been many complaints about refunds being delayed for a long time and recently there was some disturbing news about a few data entry operators working for the Income Tax department in Delhi, who diverted money meant for tax refunds into fake accounts.
The Delhi Police is probing the case. As mentioned before, you can always check your refund status online and if need be visit the local tax department office in your area.