Demand Notice under section 156 of Income Tax Act, 1961

What is the Outstanding Tax Demand Notice Taxpayers receive u/s 156?

The assessee may receive a outstanding tax demand notice under section 156 of Income Tax Act. This notice specifies the amount payable if the assessing officer raises any demand for tax, interest, penalty, fine, or any other sum as per the provision of Income Tax Act, 1961. Notice for sum payable u/s 143(1), 200A (1), 206CB (1), etc., shall be deemed to be Demand Notice u/s 156. Assessee has to pay the amount specified in the notice within 30 days of receipt of the notice. The only prerequisite to submit a response to such a notice is to be registered as a taxpayer on the e-Filing portal. A Registered user can submit a response from the portal itself.

Response to Outstanding Tax Demand Notice under section 156 of Income Tax Act

For submitting the response there are three options available with a taxpayer as below:

  • Demand is correct
  • Demand is partially correct
  • Disagree with demand

How to Respond to Outstanding Tax Demand Notice?

  1. Login to Income Tax Portal

    Login to the e-Filing portal using your user ID and password.

  2. Response to Outstanding Demand

    Click Pending Actions > Response to Outstanding Demand to view a list of your outstanding demands from the dashboard.

  3. Pay Now

  4. Submit Response

    On the Response to Outstanding Amount page, click Submit Response to submit a response to an outstanding demand. 

  5. Option 1 – Submit response if Demand is correct and you have not paid already

    On the Response to Outstanding Amount page, select the Demand is Correct option and the disclaimer Once you submit the response as Demand is correct, then you cannot Disagree with Demand later on. Moreover, On the same page, select Not paid yet option and click Pay Now

  6. Successful Payment

    On successful payment, a success message is displayed along with a Transaction ID.

  7. Option 2 – Submit response if Demand is correct and you have paid already

    On Response to Outstanding Amount page, select the Demand is Correct option and the disclaimer Once you submit the response as Demand is correct, the you cannot Disagree with Demand later on.

  8. Enter Required Details

    Select Yes, Already paid and Challan has CIN. Click Add Challan Details.

  9. Add Challan Details

    To add the challan details, select Type of Payment (minor head), enter Challan Amount, BSR Code, Serial Number and select Date of Payment. Click Attachment to upload the copy of the challan (PDF) and click Save.

  10. Submit the Response

    After entering the Challan details, click Submit to submit the response and the details of challan entered. On successful validation, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference.

  11. Option 3 – Submit response if you Disagree with the demand (Either in full or in Part)

    On Response to Outstanding Amount page, select Disagree with the demand (Either in full or in Part) option. Click Add Reasons. 

  12. Select Reason for Disagreement

    To select the reason(s) for your disagreement, select from the options and click Apply. (You can select one or more options)

  13. Enter Details

    After selecting the appropriate reasons for your disagreement, select each reason you listed on the Response to Outstanding Amount page and enter the appropriate details for each reason.

  14. Pay if you Partially Disagree

    After submission of details for all the reasons listed, click Pay Now to pay the remaining outstanding amount available in the payment summary (if you partially disagree). After payment, you will be taken to the Response to Outstanding Amount page, click Submit to submit your response.

  15. Confirm Submission

    Click Confirm to confirm your submission. On successful submission, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference.

Time limit to respond

As per Section 220, amount shall be paid within a period of 30 days from the date of service of notice. However, in some cases, time period of 30 days may be reduced by the assessing officer with prior approval of joint commissioner.

An assessee can also make an application to the AO to extend the time for payment or allow payment by installment, provided application should be made before expiry of thirty days.

Check Responded Submitted Response of Outstanding Tax Demand

  • Login to the e-Filing portal
  • Click on Services > Response to Outstanding Demand from the dashboard
  • On the Response to Outstanding Demand page, enter the PAN of the assessee and click on the option to search
  • From the list of responses submitted by the assessee whose PAN you entered, click View on the particular notice to view the response submitted by the assessee

Consequences of delay

  • Interest u/s 220(2) – Interest at a rate of one percent per month or part of the month will be payable after the expiry of 30 days. Such interest shall be payable by the assessee even if the AO has approved the application for an extension of the time period.
  • Penalty u/s 221 – AO can impose a penalty up to the amount of demand in the demand notice. Provided, a reasonable opportunity of being heard is given to the assessee. If the assessee proves that the default was for good and sufficient reasons, no penalty shall be levied.

FAQs

What will happen if I disagree with a tax demand notice?

If the assessee disagrees with the tax demand notice then he can challenge the same to the next higher authority.

Where can I find my demand notice online?

You can log in to the Income Tax Site and then select the option “Respond to Outstanding Tax Demand” in the e-File tab, and you can check the tax demand notice.

What is the meaning of assessee in default?

If the assessee does not pay the amount specified in the demand notice within 30 days of service of notice then the assessee becomes assessee in default.

Why do I need to submit response to an outstanding demand?

The Income Tax Department may find some Outstanding Tax demand against your PAN. In order to confirm if the stated demand is correct, an opportunity is given to you to respond. If you do not respond to it, the demand will be confirmed and will be adjusted against your refund (if any) or show as demand payable against your PAN ( in case, no refund is due).

What if I do not have the copy of the challan to be attached? Where can I find it?

You can reprint / regenerate your challan from your respective bank account using Net Banking or visiting the bank branch.

Notice Under Section 148 of the Income Tax Act, 1961

Section 148 stands for the reassessment of income escaping assessment. The Assessing Officer could pick income tax return for reassessment by sending a notice under section 148 subject to some pre-defined criteria for income Escaping Assessment.

Issuance of Notice under Section 148

There are various reasons as well as terms and conditions under section 148 for the issue of Notice as follows:-

Before issuing any notice u/s 148 the assessing officer must have reason to believe that any income chargeable to tax has escaped assessment along with the strong evidence. Without any proof, the officer can’t produce a notice based on mere suspicion.

There must be a direct nexus between the material coming to the notice of the assessing officer and the belief of AO that there has been escapement of income.

The material for formation of belief must be relevant and not vague based on any superficial reasoning and understanding.

The assessing officer must record reasons in writing before issuing notice under section 148. Merely a change of opinion cannot constitute a reason to believe. 

Mere a reason recorded that there is concealment of income without any specific evidence or material will not constitute a valid reason as it is vauge.

The Assessment officer cannot issue a notice based on the facts and information gained by reading the documents and information that assessee has already submitted during the course of the assessment.

The Assessing Officer can only issue a notice if and only if he/she has been presented with the new information and not by reading it by himself/herself.

If any fact or information arises, which has been disclosed previously relevant to the assessment in question, the assessing officer can immediately issue a notice under Section 147/148, even if the information has come to notice in a later period.

Who can issue a notice under Section 148

As per section 148 of the Income Tax Act 1961, the following persons can issue a notice to the assessee who has escaped assessment or reassessment of taxable income under the following conditions:-

  • Assessing Officer who ranks below the rank of Assistant Commissioner or Deputy Commissioner cannot issue a notice under Section 148. AO can issue notice only if Joint Commissioner is satisfied, on reasons recorded by such AO, that it’s a fit case for issuing such notice.
  • AO cannot issue notice to associate assessee following the expiration of a four-year period from the conclusion of the assessment year in question. Unless the Chief Commissioner is satisfied that the explanations given by the Assessing Officer are valid enough for the sending of a notice to the assessee.

Time limit to issue a notice under Section 148

As per section 149 of the Income Tax Act, If the income escaped doesn’t exceed INR 1 lakh the notice under section 148 can be issued within a period of 4 years from the end of the relevant AY (assessment year).

If the income escaped is more than INR 1 lakh the notice under the said section can be issued within a period of 6 years from the end of relevant AY subject to provisions contained in section 151.

If the income escaping assessment relates to assets located outside India the notice under section 148 can be issued within a period of 16 years from the end of the relevant AY.

Further, if an assessment has been completed under section 143(3) or 147 no further action can be taken under section 147 after the expiry of 4 years from the end of relevant AY unless income chargeable to tax has escaped assessment for such AY due to failure on assessee’s part to file the return under section 139 or 142 or 148 or fully and truly disclosing all the material facts required for the assessment for that AY.

Replying to notice under Section 148

In case assessee receives the notice under section 148, he should follow the below-mentioned pointers:

Firstly, check the notice for reasons to believe which are recorded by the assessing officer for issuing the notice under section 148. If the notice doesn’t include the reasons, then the assessee can request the assessing officer to send a copy of the recorded reasons.

In case the assessee is satisfied with the reasons recorded by the assessing officer, he/she should file the return at the earliest. If the return is already filed, he/she send the copy to the assessing officer.

In case the assessee files the income tax return in response to notice issued under section 148, it is necessary to ensure that the assessee files it carefully by declaring all the incomes and expenses to avoid unnecessary penalties.

Assessee can challenge the validity of notice before the assessing officer or higher authorities if notice isn’t served validly or reasons provided for opening assessment under section 147 aren’t proper. However, in case the decision doesn’t go in favour of the assessee, then the assessing officer could proceed with the reassessment.

FAQs

What assessee needs to do after receiving notice under section 148?

The assessee needs to produce the details of his/her income tax returns within 30 days duration that has been specified by the assessing officer in the notice given.

Who can issue a Notice under Section 148?

Assessing Officer currently who does not ranks below the rank of Assistant Commissioner or Deputy Commissioner can issue a notice under Section 148.

What happens if the assessing officer does not files his IT return after receiving notice u/s 148

The assessee shall be liable to pay interest under Section 243(3) for late filing of Income Tax return or for not filing of Income Tax return,

Notice under section 143(2) of Income Tax Act, 1961

Notice under Section 143(2) of the Income Tax Act is the second chance to assessee after Income Tax Department find major or minor discrepancies in the tax return. The discrepancy can be in the form of under-reporting the income or over-reporting of the losses. On receipt of a notice, an individual must timely respond to the tax department along with the supporting proof to defend themselves.

Reasons for issuance of notice u/s 143(2)

Income Tax Department issues notice u/s 143(2) when Income Tax Return is selected for scrutiny assessment or detailed assessment u/s 143(3).

Scrutiny assessment or detailed assessment u/s 143(3) means scrutiny carried out to confirm the correctness and genuineness of various claims, deductions, etc made in Income Tax Return. The basic purpose of this scrutiny assessment is to ensure that assessee has filed the return with the correct income and paid the tax accordingly.

Time limit for issuance of notice u/s 143(2)

AO can issue notice u/s 143(2) for scrutiny assessment only up to a period of six months from the end of the financial year in which the assessee filed his return.

For example, Ms. X filed her return on 25.07.2020 for the financial year 2019-20. In such a case, the notice u/s 143(2) AO can issue notice to Ms. X only up to 30.09.2021 being the end of six months period from the FY 2020-21 in which the said return was filed.

Types of notices u/s 143(2) of Income Tax Act

There can be 3 types of following notices under Section 143(2): 

Limited Scrutiny: This is a Computer-Assisted Scrutiny Selection (CASS) where cases are selected based on set parameters. The scrutiny will be limited to the particular area of return mentioned in the notice. An example of this scrutiny can be a mismatch in tax credits, inaccurate information, etc.

Complete Scrutiny: A complete scrutiny is carried out on the return filed along with all supporting documents. Cases are flagged based on CASS. Scope of scrutiny is not limited in these types of notices. However, the assessing officer cannot verify documents beyond the particular assessment year. 

Manual Scrutiny: Cases are selected for complete scrutiny based on the criteria defined by the Central Board of Direct Taxes; the criteria may vary every year.

How does this works?

AO can issue notice u/s 143(2) within 6 months from the end of FY in which the assessee filed his return, to carry out scrutiny of income tax return u/s 143(3).

The assessee or his tax representative will have to appear before the AO to place arguments and pieces of evidence as required by the assessing officer. Alternatively, the assessee can submit an online response to notice u/s 143(2) by uploading evidence and your arguments.

After looking over to all the evidence, AO will pass an assessment order determining total tax payable or refund to the assessee after taking into account produced evidence.

Time limit for issuance of the final assessment order u/s 143(3)

Time Limits are as below as per section 153

* For Assessment year 2017-18 or before 21 months from the end of the assessment year
* For Assessment year 2018-19 18 months from the end of the assessment year
* For Assessment year 2019-20 and onwards 12 months from the end of the assessment year

Consequences of not complying with the notice issued u/s 143(2)

If the assessee receives a notice from the Income Tax Department, and there is any default, he/she may be liable for the following:

  • Penalty u/s 271(1)(b) amounting to Rs. 10,000 and even prosecution if found guilty. However, for the A.Y commencing on or after the 1st day of April 2017 the penalty shall be levied in Sec 272A(1).
  • AO can do the best judgment assessment u/s 144 for the assessee.

FAQs

Is it possible to receive notice u/s 143(2) if I have not filed my return?

No it is possible to receive notice u/s 143(2) if I have not filed return. You might receive a notice u/s 142(1) asking for filing the return.

How will I receive this notice u/s 143(2)?

Generally, you will receive this notice via email in a PDF format on your email ID. You will also receive this notice at your postal address.

What is the final order u/s 143(3)?

If AO issues notice u/s 143(2) for production of evidence and after taking into account such pieces of evidence and hearing the arguments, the AO will make an assessment of total income or loss and also determine any sum payable by assessee or due to assessee by passing the order u/s 143(3).

Notice under section 142(1) of Income Tax Act, 1961

Notice under section 142(1) of the Income Tax Act, 1961 is to call for further details and documents from the assessee after filing the return. This notice can also be sent to require him to file his return where he has not yet furnished it. This notice is issued when information is missing from the taxpayer’s end.

Purpose of Notice under section 142(1) of Income Tax Act

Notice u/s 142(1) can be issued by the Income Tax Department for the following reasons:

1. To ask the assessee to file the Income Tax Return: If the assessee has not filed a return within the specified period of time or before the end of the relevant assessment year, then the assessee might receive notice u/s 142(1) asking to file the return.

2. Producing specific accounts and documents: If the assessee has already filed an income tax return, the Assessing Officer (AO) may ask assessee to produce such specific accounts and documents as required by him by way of Notice u/s 142(1). For example, assessee might need to produce your purchase books, sales books, or proofs of any deductions, etc.

3. Any other information, notes, or workings as desired by the AO: Assessing Officer may require the assessee to furnish in writing and in the prescribed manner the information, notes, or workings on specific points as required by him which may or may not form the part of books of accounts. For example, A statement of assets and liabilities.

Penalty for non-compliance of Notice under section 142(1)

Failure in compliance with the Section 142(1) Tax Notice may result in Best Judgment Assessment by assessing officer u/s 144. Further, the penalty includes:

  • Imposition of penalty of Rs 10,000 for each failure u/s 271(1)(b) or;
  • Prosecution under section 276D may extend up to 1 year with or without fine.
  • A warrant may also be issued u/s 132 for conducting the search.

FAQs

What do I do when I receive a 142(1) notice from the income tax department?

When notice is for filing of return, an assessee should file his return within the time period in the notice and if documents and details asked to produce and then give the same to A.O. within the specified period.

What can I expect after the submission of my ITR u/s 142(1)?

Your return will be sent for processing. If everything looks good to AO, No further action is required. Also, there are changes of notice under section 143(2) for scrutiny assessment if any information is doubtful to AO as per the documents and information submitted by you.

How to respond to this notice?

You need to respond to notice in the manner which is mentioned by AO

Section 245 of Income Tax Act

The Income Tax Department sends notices to the taxpayer for a variety of reasons. The Intimation under Section 245 of the Income Tax Act is sent in case of outstanding demand. In simple words, if a taxpayer has an outstanding tax liability of a previous financial year, the Assessing Officer (AO) can adjust such a refund against the outstanding tax liability.

What is Notice under Section 245 of Income Tax Act?

Intimation under section 245 is issued by the IT Department to intimate the taxpayer that their previous year’s pending tax dues are being offset with the current year’s refund. The details of such intimation reflect in the income tax login account of the taxpayer. The taxpayer has an option to pay the outstanding demand if they agree with the notice or submit a response if they disagree with the notice. If the taxpayer does not respond, the AO can adjust the refund against the outstanding tax demand.

Viewing Details of the Outstanding Tax Demand

Taxpayers can view the details of their outstanding tax demands on the Income Tax eFiling portal. Taxpayers simply need to login and navigate to e-File > Response to Outstanding Tax Demand. Hence, details related to the same would be available under this view. The taxpayer also has to submit a response to the IT Department. This action can also be carried out from under this view.

Responding to Notice u/s 245

It is important to go through the details of the notice after receiving it from the department. Along with the details, it is also important to realize how long does one have to respond back to this notice. Moreover, if you miss the deadline to respond to such a notice then the outstanding demand as on that date will be considered for adjustment against your refund. Following are the three possibilities:

  • Demand is Correct:
    • If you agree with the outstanding demand then you must log in the incometaxefiling portal and enter a response that states that the demand is correct. Not taking any action within the stipulated time would also mean that the taxpayer is agreeing to the outstanding tax demand
  • Disagree with Demand (Either in Full or in Part):
    • If you do not agree with the outstanding tax demand then you need to login to the portal and enter the response stating that you do not agree/partially agree with the demand. In such a situation, you will also have to provide reasons for your response
  • Demand is not Correct but Agree for Adjustment

Consequences of not Filing a response to the Notice u/s 245

The taxpayer has to submit a response to the notice u/s 245 within 30 days of receiving this notice. Failing to do so will result in outstanding demand considered for adjustment against your refund after considering interest on demand. The interest is chargeable on principal demand pending of relevant AY. Therefore, the demand of interest will be adjusted against the refund without any confirmation of the assessee.

Procedure to Provide a Response to the Notice Under Section 245 of Income Tax Act

Follow the steps given to submit a response to the IT Department

  1. Visit the e-Filing portal

    Visit the e-Filing portal and login using valid credentials.

  2. e-Proceedings

    Click on “Pending Actions > e-Proceedings

  3. View Notice u/s 245

    Click on the option to view the notice under the “Self” tab.

  4. Notice or Letter pdf

    Click on the notice/letter pdf option.

  5. Submit Response

    Click on the option to submit response.

  6. Options to Respond to the Notice

    Details of Outstanding Demand related to 245 demand will be displayed. You can either select Demand is correct or Disagree with Demand (Either full or Part) or Demand is not correct but agree for adjustment.

  7. Demand is Correct

    If you select Demand is correct, you will be required to select the checkbox and provide an answer to Have you already paid the demand amount and add the challan details, if already paid and click Save.

  8. Disagree with Demand

    If you select Disagree with Demand (Either full or Part), you will have to add reason(s) for disagreement and click Save.

  9. Demand is not Correct but Agree for Adjustment

    If you select Demand is not correct but agree for adjustment, click Continue and add a reason for disagreement.

  10. Submit Response as Priority

    Enter Set Priority for the order in which the adjustment is favoured and click Submit Response.

  11. Declaration

    Select the Declaration checkbox and click Proceed to e-Verify. 

On successful e-Verification, a success message is displayed along with a Transaction ID and Acknowledgment Number.

FAQs

Is IT section 245N(a) (iii) of advance ruling applicable for residents also?

No, section 245N(a) is applicable to non-resident. It is only applicable to a certain category of residents (including public sector units)

What happens if we do not respond to the notice within 30 days?

Applicability of a penalty is possible if there is no submission of response within the 30 day limit.

TDS Refund – How to claim and track refund status

TDS stands for “Tax Deducted at Source“. It is deducted from a taxpayer’s income like salary, interest from bank accounts, rent, etc. It has to be deducted at the rates prescribed by the tax department. The person who is making the payment is responsible for deducting the tax and depositing the same with the government. This person is known as a ‘deductor’. TDS refund arises when TDS collected is more than what you owe to the government.

What is TDS Refund?

TDS refund is about getting a part of the paid TDS tax back into your account from the Government. While filing your income tax return, you should sum up all your income from various sources, find out the tax liability, and subtract the TDS applied to your income. If the tax amount deducted is higher than the actual tax liability for the financial year, it means a refund is due from the government. The sooner you file the income tax return, the earlier you can get the TDS refund.

How to claim a TDS refund

1. When excess tax is deducted by your employer:

  • When the tax deducted does not match your actual tax payable, you can calculate your income and taxes, file an income tax return (ITR), and claim a refund.
  • While filing the ITR online, you will need to provide the details of a bank account and its IFSC code. This makes it easier for the IT department to refund you the excess tax paid.
  • In case you do not have taxable income, you can apply for a lower or NIL TDS certificate. An application for Nil/ Lower deduction of TDS is required to be filed in Form 13 to the Income Tax Officer. You can submit the Nil deduction order passed under section 197 to the TDS deductor.
ITR for NIL Income
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ITR for NIL Income
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2. TDS refund on Fixed Deposit:

  • When your income does not fall into a taxable income bracket, you need to submit a declaration in TDS refund form – Form 15G to your bank to notify them that you don’t have a taxable income. Hence, there should be no TDS on your interest income.
  • This is done to notify the bank about your non-taxable income, because of which TDS should not be deducted from the FD interest income.
  • If the bank deducts tax on your interest income in spite of you submitting the Form 15G declaration, you can claim a refund by filing your ITR.

3. Senior citizens with FD accounts:

  • As per Income Tax Act, Indian citizens above the age of 60 years are exempt from a tax deduction on FD interest earned up to Rs. 50,000 annually.
  • In case you have no taxable income for a Financial Year (after claiming the deduction of up to Rs. 50,000 for interest income), you can submit Form 15H to your bank to notify them that you don’t have a taxable income.
  • If the bank still deducts tax on your interest income from your FD, you can claim a refund by filing your ITR.

How to claim TDS Refund Online?

Follow the below mentioned steps to claim TDS refund online:

  • Visit Income Tax Website
  • If you are not registered, register yourself on the portal
  • Log in using your login credentials
  • File your income tax return by downloading the relevant ITR form
  • Fill in the requisite details, upload the form and click on submit
  • E-verify the submitted form using your digital signature, and your Aadhaar based OTP or net banking account.

How to Track TDS Refund Status?

Usually, it takes approximately 3 to 6 months for the refund to be credited to your bank account. The time it takes for the refund to be credited also depends on the completion of the e-verification. You can check the status of your refund by any of the following methods:

Check Income Tax Refund Status
Track Income Tax Refund online using PAN. The Income Tax Department issues the refund once the ITR is processed. Check your ITR refund status.
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Check Income Tax Refund Status
Track Income Tax Refund online using PAN. The Income Tax Department issues the refund once the ITR is processed. Check your ITR refund status.
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Interest on TDS Refund

If the IT department delays in paying you the TDS refund as applicable, then you are entitled to get a simple interest of 6%. This provision comes under Section 244A of the Income Tax Act. This interest accrues from the first month of the Assessment year when an ITR is filed within the due date and from the date of filing of the returns in any other case.

Note: If the TDS refund amount is less than 10% of the income tax payable, the IT Department needn’t pay this interest. Moreover, the interest, if any, received is liable to be taxed under ‘Income from Other Sources’.

FAQ

What can cause delays or non-transfer of TDS refund?

Any mistake in providing the bank account details may lead to transferring the amount to someone else or delay. To avoid any delay or non-transfer of TDS refund, you must provide the correct bank account details in the TDS certificate or ITR.

Can the deductor cancel the Refund request once submitted?

The Refund request can be cancelled only before Assessing Officer’s (AO) approval. If AO has approved the request, it cannot be cancelled.

Will a person get his TDS refund if he forgets to mention his bank details on the claim form?

No, the IT department will not be able to transfer funds in case he/she forgot to mention the bank details. Also, it is important to mention these details correctly so as to avoid the funds getting transferred to someone else’s account.

Reasons for delay in Income Tax Refund

Most of the taxpayers in India awaits the time when he/she gets the tax refund. The government of India proceeds the refunds after you have filed the tax returns. Taxpayers should file ITR in order to claim a refund of income tax on account of excessive deduction of tax at source or payment of advance tax or self-assessment tax. Many a time there can be a delay in income tax refund. There could be various reasons for not getting the Income Tax Refund including inaccurate information uploads, incomplete filing, wrong bank transactions, etc.

Check Income Tax Refund Status
Track Income Tax Refund online using PAN. The Income Tax Department issues the refund once the ITR is processed. Check your ITR refund status.
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Check Income Tax Refund Status
Track Income Tax Refund online using PAN. The Income Tax Department issues the refund once the ITR is processed. Check your ITR refund status.
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Reasons for delay in income tax refund

Sr. No. Refund Status Meaning Action to be taken

1.

 

Refund not determined Or Your return is pending for processing with the Assessing Officer

Refund request under process. The delay could be at 2 levels:

  • The IT department is taking time to process your request
  • The IT department has already processed but there is a delay at the bank’s end
Make sure that your ITR is E-verified within 120 days from the date of e-filing. If already E-verified you should wait, and check the status after some days
2. Incorrect Account Number provided
The bank account number mentioned at the time of filing your return is wrong
You can make a Refund Reissue request with the correct account details
3. Mismatch in the TDS/TCS claimed This happens because of a mismatch in Form 16 or Form 26AS and TDS/TCS claimed File an online response by logging into the income tax portal or file a revised return
4. ITR processed but submit rectification request This generally happens because of a mismatch in assessee and Tax Department calculations
Check details in intimation received u/s 143(1). Action to be taken accordingly: To submit an online response or file a revised return
5. Defective Return u/s 139 (9) Your return was incomplete or improper Login to your Income Tax India Online account and check for detailed reasons
6. A return submitted but not E-verified You have successfully filed your ITR. But e-verification of the same is still pending E-verify your ITR
7. Return processed and tax demand determined After processing your return the tax department is of view that you should still pay some taxes You can check details in intimation received u/s 143(1) and if not satisfied reply online or make the due payment
8. No Demand No refund found It means your ITR has been duly processed and there was no refund due Check details in intimation received u/s 143(1) and respond accordingly
9. Refund adjusted against Demand You had a refund payable but the same has been adjusted against some taxes payable for previous years Check notice you must have already received u/s 245 in this regard

To know more about when the income tax refund becomes due, how to claim it, you must read out the guide on Income Tax Refund Status.

FAQ

If I have paid excess tax, how will it be refunded to me?

The excess tax can be claimed as refund by filing your income tax return (ITR). After your return is processed and provided the tax department accepts your refund claim, the amount claimed as refund would be credited back to your bank account

What should one do in case of discrepancies in actual TDS and TDS credit as per Form 26AS?

In such a case, the taxpayer may not be able to claim the credit of the correct TDS. Hence, the taxpayers are advised to confirm the tax credit appearing in Form 26AS and should reconcile the difference if any. If a discrepancy is due to the deductor, then he may file a TDS/TCS correction statement and correct the same.

How to claim a refund for TDS deducted due to late PAN submission?

Your employer can file the “Correction Statement” and provide your PAN information. In this case, you have to file IT return even if your income is below the tax slabs.

Sec 139(4) : Belated Return under Income Tax

Belated Return u/s 139(4) is the return filed after the due date. The due date to file ITR for Individuals is 31st July of the assessment year (next financial year). And the due date to file ITR for Individual to whom audit is applicable is 30th September of the assessment year.

You can file belated return u/s 139(4) on or before the end of the assessment year. However, for FY 2018-19 / AY 2019-20, you can file a Belated Return till 30th June 2020 due to COVID-19.

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Who can file Belated Return u/s 139(4)?

From FY 2019-20 onwards return filing is mandatory in the following cases:

  • Total Income is more than INR. 2,50,000
  • The amount deposited in a current account held with a bank or co-operative bank exceeds INR 1 crore in a financial year;
  • Expenditure incurred on foreign travel exceeds INR 2 lakh in a financial year for himself/herself or any other person;
  • If an individual incurs electricity bills of INR 1 lakh or more in a year; and
  • For claiming capital gains tax exemption on investment in a house.

Hence Belated Return can be filed by anyone who is required to file ITR.

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Due Date to file Belated Return u/s 139(4)

As per Budget 2021, there is a proposed reduction in the deadline for filing belated, revised ITR by three months. So now the due date to file belated, revised ITR will be December 31 of the assessment year instead of March 31 of the assessment year. This change also implies that the last date for voluntarily filing the ITR for the current financial year (FY21) will be December 31, 2021. This means a taxpayer can file a belated return up to one year from the end of the financial year.

FY 2020-21 onwards – on or before 31st December of the relevant assessment year,

Up to AY 2017-18 – within one year from the end of the relevant assessment year.

Example: Ajay forgot to file ITR-1 for FY 2020-21 (AY 2021-22) on or before 31st October 2021 (Extended due date). Here he can file ITR by 31st December 2021. But his return will be considered as belated return and it will be filed u/s 139(4) and not u/s 139(1).

Consequences of late filing of ITR

Following are the consequences of filing Belated Return:

Interest Penalty u/s 234A: Simple Interest @ 1% of tax liability per month or part thereof is levied when return is filed after the due date. The calculation of interest will be from the date after the due date until the actual date of filing. For example, if the due date is 31/08/2019 and ITR is filed on 15/11/2019 then interest u/s 234A is levied for 3 months.

Late Filing Fees u/s 234F: From AY 2018-19 onwards, Late filing fees up to INR. 10,000 is levied if the return is filed after the due date. These fees are levied if the gross total income of an individual is INR. 2,50,000 or more.

Unable to Carry Forward Losses: You can set off losses against current year incomes but you can not carry forward losses incurred against future gains. However, in case of House Property Losses carry forward of losses is allowed.

Exemptions / Deductions Disallowed: In case of belated return exemptions/deductions, u/s 10A, 10B, 80-IA, 80-IB, 80-IC, 80-ID and 80-IE are not available. This is allowed only if ITR is filed on or before the due date.

How to file Belated Return?

You can file belated return u/s 139(4) in following two manners:

  1. From your Login on Income Tax e-Filing Portal,
  2. Using ITR Preparation Utility.

FAQs

Can we revise Belated Return?

Yes. From FY 2016-17 (AY 2017-18) onwards Belated Return can be revised. Belated Return of earlier years can not be revised.

Can I file my ITR after the due date?

Yes, ITR can be filed after the due date. But it will be considered as Belated Return and late filing fees will be levied.

Do I need to e-verify Belated Return filed u/s 139(4)?

Yes. A taxpayer needs to e-verify the Belated Return filed after the due date. It will not be processed by the IT Department unless it is e-verified.

Can I claim a tax refund for the belated return?

Yes, you can claim a refund of TDS deducted while filing belated return u/s 139(4). The refund will be credited directly to your bank account mentioned in ITR. Make sure to pre-validate your bank account for the easy processing of a refund.

Reprocess the ITR : e-Filing portal

Once you file an income tax return, the IT Department processes your return and sends an Intimation comparing the figures as reported in the ITR and as computed by the IT Department.

There are 2 possibilities in the Intimation :

  • Computation of Income & Tax as reported in ITR match with figures computed by the IT department.
  • There is a mismatch in the figures in ITR filed and figures computed by the IT department.

Types of Mismatch in Intimation

  • Mismatch in Tax credit.
  • Advance Tax mismatch.
  • Clerical error
  • Higher Demand of Tax than reported.
  • Less Refund of Tax than reported.

If the assessee does not agree to some clerical/arithmetical error in intimation issued, then assessee can opt for Reprocessing of his ITR form on Income Tax e-filing portal

Steps to Reprocess the ITR

Follow the below given steps to Reprocess ITR:

  1. Go to Income Tax E-filing Portal

    Login using valid credentials on Income Tax e-Filing portal

  2. Click on e-file on the Dashboard

    And select “Rectification” from the drop-down list.

  3. Select the Order/Intimation from the drop-down list you want Reprocess

    And click on “Continue”.

  4. Select “Only Reprocess the Return”

    From the drop-down list in Request Type.

  5. Click on “Submit” and your request will be submitted.

    On successful submission, a return will be sent to CPC for “Reprocessing”.

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FAQs

When can Request for “Reprocessing the Return” can be submitted?

Rectification Request for Reprocessing ITR can be filed only for the returns which are already processed by the CPC, Bangalore.

Can rectification request be filed online?

Yes, rectification request must be filed online on e-filing portal mandatorily.

How many times a request can be submitted for any particular ITR?

Rectification Request can be submitted only once for any particular ITR.

What is Due Date for filing the Rectification Request?

The due date for filing rectification request is 31st March of the relevant assessment year of the period for which ITR is filed.