The Income Tax Department(ITD) has recently announced that e-refunds will only be issued to individuals who have linked their respective bank accounts with their PAN. The department will start the new practice of issuing e-refunds to the bank accounts linked to PAN from 1st March 2019 onwards.
The Department generates the income tax refunds after processing the IT returns according to the latest applicable income tax slabs. Then the refunds are transmitted from Central Processing Centre(CPC), Bangalore to the State Bank of India(SBI), CMP branch, Mumbai (Refund Banker) on the next day for further distribution to taxpayers.
At present, the income tax refunds are being issued in two ways, one by bank RTGS/NECS and another through paper cheques. To get the income tax refunds by either of these ways, the taxpayer has to submit the correct bank account number and IFSC code of the bank in his returns.
Post the announcement, the taxpayers will be required to validate their bank accounts on the ITD e-filing portal to receive the refunds. The eligible persons will receive the income tax refunds in the bank accounts linked to their PAN from March 1, 2019 onwards. The bank account can either be a savings account, current account, cash account or an overdraft account.
The department has urged the taxpayers to link their bank accounts with PAN to get a smooth and secure income tax refunds. In case, the taxpayers’ PAN is not linked to their bank accounts then they can validate the bank account with PAN through Electronic Verification Code (EVC) and net banking channels, provided the bank is integrated with the ITD e-filing portal.