Every taxpayer looks forward to speedy processing of their income tax refunds. The income tax department can adjust outstanding tax demand for any year against your income tax refund. In such cases, the net amount stands credited to the account of the taxpayer. There are cases where the entire refund is adjusted too. Hence, the department has decided to issue refunds up to Rs 5,000 without making adjustments or reducing against outstanding tax demand.
A taxpayer can seek a refund of taxes paid by way of TDS, TCS and advance tax. TDS stands for tax deducted at source on payments received by you such as salary, professional fees, interest and so on. TCS stands for tax collected at source on transactions such as the purchase of a car with an invoice value above Rs 10 lakh, jewellery above Rs 5 lakh and so on.
A taxpayer may also pay advance tax during the financial year in case their tax liability after claiming credit for TDS and TCS exceeds Rs 10,000. Advance tax is payable in four instalments during the fiscal year on June 15, September 15, December 15 and March 15. In case the advance tax paid exceeds the tax liability determined at the time of filing of tax return, you can claim the excess as a refund.
Mr Anurag Thakur, the Minister of State (MoS Finance), gave a written reply last week in Lok Sabha stating that department will process refunds up to Rs 5,000 without tax adjustments. The refunds are credited directly to the bank account of the taxpayer.
Taxpayers who have not yet filed their returns for the FY 2018-19 (AY 2019-20) can file on or before 31 March 2020, and claim refunds, if any. Do note that taxpayer should complete the verification of the return through Aadhaar OTP or net banking to facilitate the processing of the return and refund.
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I am a Chartered Accountant by profession. I specialise in personal taxes and corporate income tax matters. I am an avid reader and track developments in financial markets, economy and other market developments.