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What is an Income Tax refund ?

Income Tax refund arises in case of a difference between the tax amount paid and the actual payable amount. This usually happens when the advance tax, self-assessment tax paid and/or TDS deducted of the taxpayer is higher than the total tax liability of a taxpayer during the financial year. You can claim this refund at the time of filing your income tax return (ITR).


If the amount paid is higher than the actual amount payable, a refund is initiated. The Form 30 is used for the same purpose.


Form 30 is basically a request for your case to be looked into and the excess tax that you have paid is refunded. Your income tax refund claim needs to be submitted before the end of the financial year.

When you file the return of your income, you can avail tax refund. In general, the date for filing income tax returns is July 31 of every year unless extended.


Some points you need to keep in mind:

  • Income tax refund claims will not be considered if six successive assessment years have been completed.
  • The refund amount must be less than Rs.50 lakh for a single assessment year.
  • Interest will not be offered on refund of late claims.
  • If the delayed claims require verification, the assessing officer could reconsider the claim.

How to calculate income tax refund ?

If you have filed your ITR correctly, the tax department will automatically process the refund if you are eligible for it. If you are new to ITR filing, here are the steps you can follow to ensure you get your refund.

  • Log in to the official returns filing portal of the IT department.
  • Register with your PAN which will then become your user ID for the portal.
  • Under the ‘Download’ tab, select the relevant assessment year along with ITR form.
  • Open the downloaded Excel utility and provide all the details mentioned in your Form 16.
  • In case if you have paid more taxes, it’d be automatically calculated and displayed under the “Refund” field of your ITR form.
  • Confirm all the details, and an XML file will be generated and saved on your computer.
  • On the online tax portal, click on “Submit Return” button and upload the XML file.


How to claim income tax refund ?

Once you fill up the entire ITR form applicable to you, the ITR form will automatically calculate the income tax refund which is due to you. This will be shown in the ‘Taxes Paid’ section of the ITR form.

After processing of return, an intimation will be sent to your registered email ID informing you about the outcome of the processing of ITR.

In case refund due to you is accepted, the intimation sent will also state the amount of refund that is payable. This intimation will have the refund reference number. One can track the status of his/her refund on the new income tax e-filing portal. 

The department has designated State Bank of India (SBI) for payment of refunds by directly crediting it into the taxpayer’s account. It is advisable that you mention the correct bank details (such as bank account number, IFS code) in your ITR form to get timely payment from the department.


Interest on income tax refund

An individual will also receive the interest on the income tax refund if the ITR is filed irrespective of the deadline.

Interest is calculated using the simple interest method on the amount due for refund at the rate of 0.5 percent for a month or part of the month or at 6% per annum.

Once you have filed your ITR and verified it, regularly check the status of your return if you have made a refund claim. This helps you track the processing of your ITR and refund (if any). It also helps check if you have made any mistake while filing the return.

If you want to claim your refund or file an income tax return, our team will assist you at every step.

Claim your refund

File ITR at just Rs 500/-