Pay Attention To Your Tax Refund Situation To Prevent Adjustments

The tax return filing process has ended for most individuals, and now it’s time to ensure that the remaining part of the cycle is completed.

This deals with the handling of any requirements related to the assessment of the tax returns. Already, a significant number of taxpayers have found that their assessment has been completed. Many of them have a refund to collect, and this is where attention needs to be focused.

The assessment order, which is sent by the Income Tax Department, has all the details of the income that has been submitted, along with the tax paid and any additional tax to be paid or refund that is due. In the event that the refund that has been claimed and the assessment arrive at the same figure, this should be received by the taxpayer in their bank account.

This is where the problem starts for many people, and there are two main issues that they face. One is that the refund does not come at all, and the other is that the refund is adjusted against some other demand under Section 245 of the Income Tax Act. Tackling both of these situations is important so that the amount is received.

There are a lot of cases where there is a problem with the bank account that has been given or mentioned in the income tax return, due to which the refund gets stuck and is not received by the taxpayer. One common thing that has been witnessed is that the bank account mentioned for receiving the refund has been closed. The account would have been mentioned as the one where the money should come in the past year, but now that the account no longer exists, it cannot receive the amount.

The other thing that happens is that the bank account where the refund is to be received has not been verified. The way to tackle this situation is to check the bank account details to make sure they are correct. If there is a wrong bank account number, then this needs to be updated, and then the account has to be verified. All this can be done through the login on the income tax return filing website.

Once this is done, the refund will be credited to the bank account.

The Income Tax Department can also set off the refund that is due against some demand that is outstanding under Section 245 of the Income Tax Act. If this is done, then the taxpayer might receive nothing or only a partial payment, depending on the amount that is due for the past year.

The taxpayer should first check the demand amount in the past year to see if this is actually correct, because lots of times there might be a dispute that is pending or the amount might have been paid. If the details are not correct about the past demand, then this needs to be tackled by submitting a response saying you do not agree with the demand, either in part or full, and then giving the reason why this is not agreed upon. If this is done, then the tax department will take your objection into consideration, and you are likely to get the refund that is actually due to you.

One of the things that should never be done is to ignore the notification from the tax department.

The taxpayer has to respond as quickly as possible to such a situation, within 15 days if they have an objection. If this is ignored, then it will be assumed that the taxpayer has no problem, and the refund will be set off. In fact, if the demand is greater than the refund, then additional amounts will also have to be paid. This is why the taxpayer has to ensure that they respond to any such detail and clear up this situation.

Arnav Pandya is founder at Moneyeduschool

The views expressed here are those of the author and do not necessarily represent the views of BQ Prime or its editorial team.