The deadline for filing income tax returns (ITR) passed more than two months back. While a significant number of taxpayers have successfully received their refunds, a considerable segment is still facing an anxious wait. Typically, the Income Tax Department aims to process and disburse these refunds within a period of four to five weeks. However, this timeline is not guaranteed for everyone.
Key Reasons Behind ITR Refund Delays
Several technical and procedural issues can halt the smooth processing of your refund. Common obstacles include mismatches in bank account details, failures in Aadhaar-PAN linkage, and incorrect claims made in the return. Adding to these existing challenges, the Central Board of Direct Taxes (CBDT) Chairman, Ravi Agrawal, recently highlighted that the department is intensifying scrutiny on wrongful deductions. These additional verification layers are contributing to the current backlog and extended processing times for many filers.
For eligible taxpayers, the law provides for interest on delayed refunds at a rate of 6% per annum. This interest is computed starting from the 1st of April of the assessment year until the actual date the refund is issued. Nevertheless, there are specific scenarios where a taxpayer might not be entitled to receive this interest, despite the delay.
When Will You NOT Receive Interest on a Delayed Refund?
Tax expert CA Chandni Anandan from ClearTax explains the critical conditions under which interest is not payable. The eligibility heavily depends on the total refund amount. As per Section 244A of the Income Tax Act, if the refund amount is less than 10% of your total tax liability, you will not receive any interest. Furthermore, she clarifies that if the refund sum is below ₹100, no interest is applicable.
The reason for the delay is another decisive factor. Interest is not granted for periods where the holdup is attributable to the taxpayer's own actions or delays from the entity responsible for deducting Tax Deducted at Source (TDS). Similarly, if a refund is withheld due to pending assessment proceedings against the taxpayer, the duration of those proceedings is excluded from the interest calculation period.
How is Interest on ITR Refund Calculated?
The calculation method differs based on when you filed your return. If you filed your ITR within the due date, interest is calculated from April 1 onwards. However, for those who filed a belated return (after the due date), the interest clock starts ticking only from the date of filing until the date the refund is finally paid. This makes timely filing crucial for maximizing potential interest benefits.
Step-by-Step Guide to Check Your ITR Refund Status Online
If you are awaiting your refund, you can easily track its status through the official Income Tax e-filing portal. Follow these steps:
- Visit the Income Tax Department's e-filing portal at: eportal.incometax.gov.in/iec/foservices/.
- Log in to your account using your User ID (PAN) and password.
- Navigate to the 'e-File' menu, select 'Income Tax Returns', and then click on 'View Filed Returns'.
- You will see a list of your current and past filed returns. Select the relevant assessment year.
- Click on 'View Details' to check the specific status of your income tax refund for that return.
Disclaimer: This information is for educational purposes only and should not be considered as legal or tax advice. Taxpayers are strongly recommended to consult with a qualified tax professional or refer directly to the official Income Tax Department website for precise and updated guidance related to their specific case.
