People often come to us with a complaint of not receiving refunds from the Income Tax Department. This is a common issue as there are multiple reasons why the Income Tax Department holds back Refund. So I have decided to finally decode the reasons behind it and present them to you. In this blog, I will explain to you seven reasons why IT-department blocks your Refund.
But first, let’s understand what the Refund is.
Income Tax Refund
There are multiple instances where the taxpayer pays advance tax, self-assessment tax, or the TDS (Tax Deducted at Source). At the end of a Financial Year, if the taxpayer’s total tax liability is below these taxes he/she has already paid, the Government will refund the difference.
This difference returned by the Government to a taxpayer is called an Income Tax refund.
The reason why IT-Department holds your Refund
- Incorrect bank details
Refund from the IT-Department comes directly to your account. So it is vital to provide accurate bank details to the Department. Following errors in bank account detail can lead to the withheld of the Refund.
- IF your account number or MICR code is wrong, you will not Refund. In such a case, you will have to apply for the Refund online’s reissue by providing the correct Account number or MICR code.
- If there is an error in the description of your account, your Refund can get stuck. You will have to apply online for the reissue of the Refund.
- Any discrepancies in the details
If there is an error in your ITR, then your return will be sent for human verification. During this process, the tax-officer will perform an in-depth analysis of your ITR, resulting in the delay of your Refund by weeks.
So it is vital that you make sure all the information provided in return is correct.
- Incomplete ITR
This happens mostly when you file a paper ITR. People often forget to add some critical information like details about their LIC policies or Cash on Hand. As the tax officer verifies such an incomplete return, the refund process may get delayed. So we recommend you file ITR online or get assistance from an expert.
- Any mismatch in TDS/TCS
If your TDS deductor or your employer files the wrong TDS return, there can be a mismatch in TDS & TCS. This can result in withholding the Refund from the Department. To solve this issue, either you will have to approach your TDS deductor or your employer.
- Tax Fraud
This is a very serious cause of concern for taxpayers, but very few of them are aware of this. This fraud works as follows. Some conman steals your identity and files ITR in your name. This is done to get a refund in their own account instead of yours.
So it is vital that you do not fall prey to this systematic fraud. If you have already fallen prey, contact the relevant authorities immediately.
- The requirement of additional documents
Often when people get their returns filed by a novice or inefficient person, this issue can arise. Such novice tax-consultants forget to add some crucial documents to your return. If the IT-Department raises an issue regarding these documents, you will have to submit the required document. This will result in the delay of your Refund.
So it is always better to get your ITR filed by an expert with years of experience and knowledge of the industry.
- Incorrect or no KYC with the Bank
If you have not done the KYC process with your Bank, your Refund will not reflect in your bank account even if the IT-Department processes it. Make sure you have done the KYC with the bank account you are providing to the IT department.
- Delay in the process
There is a provision for releasing the Refund within 45 working days of filing the return, but sometimes the return is delayed as:
- Delay from the It-Department due to reasons mentioned above
- Delay from your Bank
In the first case, you can raise the complaint with the IT department to resolve the issue. In the second case, it is advisable to contact your banking authorities to find out the issue and solve it immediately.
Conclusion
Your Refund is your right, so don’t let it slip away due to any of the above reasons. Make sure you connect with the right Tax–a consultant who can help you file your return correctly. This will help you avail your Refund quickly and build a good financial profile.
At Probal Consulting Group, our accounting & taxation experts ensure that you get your refunds on time. If you have already filed your return but haven’t got a refund yet, talk to us today, and we can help.
For any further information, feel free to reach out.
Global Consulting Group is a leading Taxation, Accounting, and Compliance firm that helps individuals, MSMEs, and other businesses manage their accounting, taxation regulatory compliance affordably.
