Tax refunds are something only few of us get while most of us don't. Therefore, it is essential to learn some basic things about tax refunds.
What is tax refund?
A tax refund or 'tax rebate' is a refund on taxes when tax liability (the amount of tax to be paid) is lesser than the amount of taxes paid by the individual. However, you can also claim a tax refund in case taxes were deducted because you hadn't declared your investments, which could have saved 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 cases, 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 Form 16 that you receive from your employer if you are a salaried individual.
How do I get a tax refund?
The tax return will show the amount of refund (if any is applicable). In case 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 do not have the proper documents to show the investments made or you think you forgot, a 'revised return of income' needs to be submitted.
Also, the actual claim for the tax refund needs to be filed using Form 30. The income tax department has recently started an initiative using which you can check your tax return status online.
When can I claim for a tax refund?
Tax refund needs to be claimed within one year of the last day of assessment year.
What to do if I do not receive my tax refund?
If you do not receive your tax refund within a reasonable time (it 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 office for a follow up of the refund or you can write a letter (along with a copy of the tax return acknowledgment) to the concerned income tax assessing officer.
If it is still not redressed, you may write a letter to jurisdictional chief commissioner of income tax with a copy sent to the grievance cell and also the concerned income tax officer. This letter may be accompanied by copies of previous letters written to the income tax assessing officer and a copy of the tax return filed.
If you do not want to wait for a long time to get a tax refund, you need to make sure that you plan your taxes 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.
It is important that you keep track of any refunds you are eligible to receive, since there have been many complaints about refunds being delayed for long periods of time. Recently, there was disturbing news about few data entry operators working for the income tax department, Delhi, who diverted money meant for tax refunds into fake accounts. Delhi Police is probing the case. As mentioned earlier, you can always check your refund status online and if need be visit the local tax department office in your area.
Disclaimer: BankBazaar.com is an online loan marketplace. All information in this article has been provided by BankBazaar.com and NDTV Profit is not responsible for the accuracy and completeness of the same.