Keep track of your tax refund

So the tax filing season is back and you are wondering what happened to your tax refund i.e. the amount of tax you paid in excess of the amount payable as per the provisions of Income-Tax Act, 1961 (‘the Act’).

In India, there is a provision under the Act by way of which a taxpayer can claim refund by filing Form 30 within one year from the end of the assessment year to the Indian Revenue.

If there is a delay in payment of refund, there is also a provision which requires the Indian Revenue to pay interest to the tax payer in addition to the tax amount.

Like any other developing countries, India has also experienced the stress on the existing revenue collection system on account
of over-dependency on manual processing.

Under manual processing system, there was no control on the system and refunds were overdue, resulting into unnecessary outgo of interest from the treasury of Indian Revenue. To overcome these problems, the income-tax department in recent years has experimented with a number of technology initiatives for streamlining the administration of tax collection and payment of refunds.

Centralised processing of returns was one of those technology-driven initiatives which was introduced a couple of years back to expeditiously determine the tax payable by or refund due to the taxpayer. Under this system, individual tax-payer is allowed to track
the status of his/ her income tax refund on-line.

It is known as ‘Refund Banker Scheme’ wherein the refund generated on processing of income-tax returns by the assessing officers/ central processing centre, Bangalore is transmitted to State Bank of India, CMP branch, Mumbai (Refund Banker) on the next day of processing for further distribution to the taxpayer.

Currently, it is operational for non-corporate taxpayers assessed in Delhi, Mumbai, Kolkata, Chennai, Bangalore, Bhubaneswar, Ahmedabad, Hyderabad, Pune, Patna, Kochi,

Thiruvananthapuram, Chandigarh, Allahabad, and Kanpur. The important features of this system are summarised below:

• i.e. ECS and paper. In case of ECS mode, the taxpayer is required to quote bank account number and MICR code of bank branch at the time of submission of income tax return.
• Taxpayers can view status of refund online after 10 days of processing of refund by the assessing officer to the Refund Banker.
• The taxpayer can track the status of the refund online at the website of the income-tax department www.income taxindia.gov.in by clicking on “Status of Tax Refunds”.

Refund status can be tracked by entering the PAN and assessment year for which refund is to be tracked.

Apart from online tracking of refund as mentioned above, if the refund is not paid to the taxpayer on time, he may also approach the income-tax ombudsman with his/ her grievances.

Further, the taxpayer can also file an application under Right to Information Act, 2005, to find out the status and to track his tax refund.

The writer is a senior tax professional with Ernst & Young Views
expressed are personal.