A refund is a sum of money paid by the Income Department if a taxpayer has paid more tax to the government than his actual tax liability. It generally happens when the advance tax, self-assessment tax paid, and/or TDS deducted from the taxpayer is higher than the total tax liability of a taxpayer.
Once your income tax return (ITR) is processed, it usually takes 30-60 days for you to receive your refund. However, there can be many reasons for your refund not reaching you but usually, it happens due to inaccurate information, incompleteness wrong account details provided in the return.
In this article, we are going to discuss 8 such reasons behind it.
1. Refund can be stuck if your tax return contains inaccurate information
If your tax return has numerical errors or other mistakes, that can slow the pace of your refund. When an error is detected, your return is earmarked for human review, meaning an assessing officer must comb through it to find the mistake. That can add days or weeks to the processing time.
2. If your return is incomplete
Having an incomplete return can also trigger an AO for review, which could mean a longer wait for your refund. If you filed a paper return, for example, and forgot to enter in a key piece of information like your TDS or you provided debtors in the creditor’s list. The AO won’t process your return until those items are checked off.
3. You’re a Victim of Tax Fraud
One type of tax fraud involves someone using your personal information to file a fraudulent tax return and claim a refund in your name. For the 2020 tax-filing seasons, the AO identified more than 58,000 fraudulent refund claims, with close to 40,000 of them tied to identity theft. If you think you’re a victim of tax-related identity theft, you can contact the IRS and the Federal Trade Commission to report it.
4. Your Refund Was Sent to the Wrong Bank
Filing your return electronically is the fastest way to get your refund, especially if you’re using direct deposit. That assumes, however, that you plugged in the right numbers for your bank account. If you transposed a digit in the routing or account number, your money could be sent to someone else’s account.
5. Need for additional documentation
One of the common reasons for not getting refunds is the need for additional documentation. “This may be required to support the claim or pending past demands or maybe for the operational issue,” You have to check the intimation report provided by the department.
6. Mismatch in the TDS/TCS claimed
The mismatch in TDS claimed in 26AS could be due to wrong filing of TDS return by the employer or TDS deductor (i.e. bank etc.) and taxpayers may need to approach them to correct their TDS return.
However, there are instances where even the records of the department do not reflect the correct TDS. In such cases, the taxpayer is supposed to file an online response by logging into the income tax portal.
7. Incorrect bank account details
There are chances that the taxpayer did not give the correct bank account number or other bank details while filing the income tax return (ITR). There might be a chance of human error or some of the reasons given below:
- Incorrect A/C No.
The account number provided by you was incorrect. You are requested to apply for a refund reissue by providing the correct account number to claim your refund. The refund reissue can be applied online by following the procedure.
- Incorrect MICR code/unavailable
The MICR code provided by you was incorrect or not provided. You are requested to apply for a refund reissue by providing the correct MICR code to claim your refund. The refund reissue can be applied online by following the procedure.
- The account has been closed
The account number provided by you was closed. You are requested to apply for a refund reissue to claim your refund with the new account number. The refund reissue can be applied online by following the procedure.
- Account Description incorrect
The account description provided by you was incorrect. You are requested to apply for a refund reissue to claim your refund with the correct account description or with the new account number. The refund reissue can be applied online by following the procedure.
8. Refund request under process
The delay could be at 2 levels:
- the I-T department is taking time to process the request,
- the I-T department has already processed but there is a delay at the bank’s end.
Hope you all know the reason behind the refund issues. If your refund stucked due to same reason, do check yours with the help of this article and rectify the same for fast processing of your refund.