ew situations match the sheer pleasure of money being returned, especially if it is from the tax department.
Of course, they won't do it on their own. You must inform them that you overpaid on your taxes first.
Here are some steps to get the process right.
1. What is a refund?
Simply put, a refund means 'to pay back'. The Income Tax Department does this if you have paid extra tax.
In a given financial year (April 1 to March 31), if you have paid more than your tax liability, you can legally claim the excess amount paid.
2. Who can claim a refund?
Only you. But if an individual is not in a position to claim a refund due to death, incapacity or any other reason, a legal representative can do it.
His/her trustee, guardian or legal heir is also entitled to claim and receive the refund on his/her behalf.
3. When must I claim a refund?
It should be claimed within one year from the last day of the assessment year.
Say you want to claim a refund for 2003-04. The last day of this year is March 31, 2004. One year from the last day will be March 31, 2005.
So you should file the refund claim on before March 31, 2005.
Incidentally, when the tax man talks of the assessment year being 2003-04, he is referring to the financial year of 2002-03.
4. How can I claim a refund?
You can claim a refund in the return of income.
Let's say you forgot to do so when you filed your returns or could not do so because you lacked the proper documents.
Now, you can claim a refund by filing a Revised Return of Income within the above specified period of time.
The actual claim for refund must be filled in Form 30.
5. What is the maximum time when I can receive my claim?
The refund should come within a year of filing your returns.
If there is a delay, please write to the concerned officer. Or you can approach the Public Relations Officer of the Income Tax Department for help.
6. How is the refund given?
The refund cheque comes to the address mentioned on the Return of Income that you file.
7. Can it be directly credited to my account?
Yes, thanks to the Income Tax Department's Electronic Clearance Scheme.
Once your income tax return is processed, the refund will be credited directly to your bank account. Make sure you mention the bank name and account number in the Return of Income.
Soon, the IT department will start a service wherein you can log in and check the status of your refund.
8. Are there any restrictions to the ECS?
Yes. Three conditions must be fulfilled:
i. You must be a salaried taxpayer filing your return in Form 2E.
ii. You must be a resident of one of the 12 cities (Ahmedabad, Bangalore, Bhubaneshwar, Chennai, Hyderabad, Kanpur, Kolkata, Mumbai, Nagpur, New Delhi, Patna, Thiruvananthapuram).
iii. The refund must only be up to Rs 25,000.
9. Will interest be payable on the refund?
Interest on any refund is given at 0.5 % per month from the first day of the assessment year to the grant of refund if you have filed your returns before the due date.
But no interest is paid on delayed returns.
10. Can the refund be set off against some other payment?
Yes. If you owe the IT department some outstanding amount for that assessment year or a previous assessment year, the Assessing Officer can set off the refund against such tax/demand after giving due intimation to you.
Illustration: Dominic Xavier
More from rediff