Haven't Received Tax Refund After Filing Income Tax Return? Know Reasons & Solutions

Despite the timely filing of over 81.8 million income tax returns for the assessment year 2023-24 by the December 31, 2023 deadline, some taxpayers are facing significant delays in receiving their expected tax refunds. In this overview, we delve into the reasons for these delays, the resources accessible to taxpayers, and the responsibilities they should be mindful of. If a taxpayer has submitted their Income Tax Return (ITR) and hasn't received the refund, here's what happens:

After e-verification or manual verification by the taxpayer, the Department processes the ITR. It sends an Intimation-cum-Notice under Section 143(1) of the Income Tax Act, 1961, to the taxpayer's registered email. This notice informs them of eligibility for a refund and initiates the crediting process to their pre-validated bank account if eligible. The taxpayer can access this intimation on the e-filing portal using their login credentials.

If the refund is not received within 4-5 weeks or 2-3 months, it may fail due to reasons like the department withholding it to adjust against old tax demands. In such cases, the Department will hold the refund until the taxpayer addresses certain issues.

What should a taxpayer do?

Filing the return is just the beginning; taxpayers must regularly check their emails, mobile notifications, and the e-filing portal for any communications from the department. Several reasons may cause delays, but most of them require action from the taxpayer's end to resolve.

1. Forgot to e-verify after filing the return.

2. Filed the return offline, causing processing delays.

3. Failed to send the signed acknowledgment's hard copy to CPC Bengaluru within 30 days.

4. TDS/TCS mismatch between Form 16/16A and Form 26AS.

5. PAN became inoperative due to non-linking with Aadhaar.

6. Name mismatch between PAN and pre-validated bank account.

7. The bank account needs pre-validation for the refund, now mandatory.

8. Wrong bank details – Name, account number, IFSC.

9. Provided a non-operative/dormant bank account while filing the return.

In addition to the above, delays may occur from the Department's side:

1. Refund request rejected due to additional tax.

2. Refund request still being processed, may take extra time.

3. Return under scrutiny for accuracy and compliance check.

4. Additional documents are required from the taxpayer.

5. Process initiated to adjust refund against old tax demands.

6. Return marked as defective.

How to Request Refund Re-issue (for refund failure)?

1. Log in to the 'e-Filing' Portal at https://www.incometax.gov.in/iec/foportal/ 

2. Select 'Refund Reissue' under the 'Services' menu.

3. Create a Refund Reissue request.

4. Choose the Assessment Year for the failed refund.

5. Validate and select the bank details, then submit the request.

This process ensures that the refund is issued to the pre-validated bank account. If you receive communication from CPC regarding refund failure, follow the aforementioned steps on the e-filing portal.

Also Read: Improving the Attractiveness of the New Personal Income Tax Regime