Procedure and duration for claiming a tax refund

  • Taxation laws allow the assesse to claim refunds for excess tax paid to the government during a financial year. A tax refund applicable to employees falls under the following:

    Tax Deduction at Source at a rate higher than the actual tax payable.

    The companies ask their employees to submit a proof of their tax returns & savings investment so that such savings and investment can be set off against the tax that is deducted.

    Section 237 and 245 of Income Tax Act, 1961 deals with provisions relating to refund of taxes and any such refunds arise on an assesse satisfying to the assessing officer that the amount of tax paid by the assesse for any year exceeds the amount of tax payable by him.


    What is the procedure to Claim Refund?

    1. For any assesse to claim a refund under the IT Act, he/she shall do so by filing form 30.
    2. Under the ordinary course, a tax refund may be claimed during/while filing the Income tax returns.
    3. There is no tax applicable for refunds as the same is receipt of excess tax paid and not income earned.
    4. It takes 4 to 6 months from the date of filing the Income Tax returns to receive the refund.
    5. The claim of a refund shall be made within one year from the last date of the assessment year.
    6. In case of any delay due to any reason, an application for condonation shall be filed before the tax authorities provided the same is extended beyond six years.
    7. Eligibility for Interest on the refund is calculated at the rate of 0.5% per month and 6% per annum from the first day of assessment year until the date when the refund is paid to the assesse.
    8. A rejection on tax refund may happen in the event of incorrect calculation of tax payable by the assesse.


    What is the procedure for claiming TDS refund?

    There are no specific forms to be filled for claiming tax deduction as the same can be done while filing the income tax returns.
    A TDS refund should be claimed in 4-6 months and any refund to be received shall have an interest coverage of 6% per annum if the refund payable is more than 10% of the total payable for that year.


    These guides are not legal advice, nor a substitute for a lawyer

    These articles are provided freely as general guides. While we do our best to make sure these guides are helpful, we do not give any guarantee that they are accurate or appropriate to your situation, or take any responsibility for any loss their use might cause you. Do not rely on information provided here without seeking experienced legal advice first. If in doubt, please always consult a lawyer.

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