The income tax return (ITR) season ended over two months ago. While many taxpayers have already received their refunds, others are still waiting. Usually, the Income Tax (I-T) Department processes and issues these refunds within four to five weeks.
However, several issues can prevent your payment from being processed. Common hurdles include mismatched bank details, Aadhaar-PAN linking errors, or incorrect claims. Recently, CBDT Chairman Ravi Agrawal said that the department is now investigating wrongful deductions. These extra checks are adding to the current processing delays.
Notably, interest on delayed refunds is charged at a rate of 6% per annum. This interest is calculated from 1 April onwards until the date of refund. However, a taxpayer may not receive interest in certain cases.
Why you may not receive interest on delayed ITR refunds?
Here are the top reasons why a taxpayer may not receive interest on delayed refunds:
Total refund amount
The interest on delayed ITR refunds will depend on the total amount of refunds and the minimum refund amount.
According to CA Chandni Anandan, Tax Expert at ClearTax, “If the refund amount is less than 10% of the total tax liability, you will not receive interest on the income tax refund as per section 244A of the Income Tax Act.”
The expert noted, “If the refund money is less than ₹100, you are not eligible for interest on the refund.”
Reason for delay
Interest on delayed tax refunds is not applicable if delays are due to the taxpayer or TDS deductions. Periods of pending assessments will also not be considered for interest calculations.
“If the refund processing is delayed because of the delays caused by you or the person deducting TDS, then you will not be eligible to receive interest on such refund attributable to such period,” Anandan said.
“If an assessment is pending for the taxpayer, the period during which the refund is held back due to those proceedings will not be counted when calculating interest on the income tax refund,” she added.
How is interest determined?
According to the expert, “If you file your ITR beyond the due date, the interest amount will be reduced. Interest on the income tax refund will be calculated from 1 April if you file the return within the due date. Interest will be calculated from the date the return is filed until the date of the refund payment if you file a belated return (beyond the due date).”
How to check ITR refund status?
Check out the steps to check the ITR refund status:
Step 1: Visit the income tax portal at eportal.incometax.gov.in/iec/foservices/.
Step 2: Log in to your account with your user ID and password.
Step 3: Select the ‘e-File’ tab, click on ‘Income Tax Returns’ followed by ‘View Filed Returns’
Step 4: The status of your current and past income tax returns will be displayed on the screen.
Step 5: Select the ‘View details’ to check the status of your income tax refund.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Taxpayers are advised to consult a qualified tax professional or refer to the official website of the Income Tax Department for accurate and up-to-date guidance before filing their returns.
About the Author
