Income tax return filing
The taxpayers should file their income tax returns by the due date to avoid any late fees and the penalty. The ITR processing starts only with the filing of the return; it can be on time or after the due date. However, it is also advisable to file the returns on time for quick processing.
The department starts the Income Tax Processing only when the return has been successfully verified. The taxpayer has to verify the return by sending the ITR-V (Acknowledgement) after signing it with a blue ink within 120 days from the date of filing the return. ITR-V will be physically sent to the Central Processing Center (CPC). Once they receive it, CPC will send an acknowledgement on the registered email ID of the taxpayer. The taxpayer should correctly mention the email address in the return form as all the communications between him, and the department will take place through that email ID alone. Also, the taxpayer can e-verify the return after filing it instead of sending the acknowledgement physically to the department. It can be done through any one of the following means:
EVC code through the department’s website
giving bank account details on the e-filing website
giving DEMAT account details on the income tax e-filing website.
ITR processing under section 143(1)
After the verification of the ITR, the department processes the income tax return and sends the intimation under Section 143(1) of the Income Tax Act, 1961 once the Income Tax Processing is done. The intimation will be sent via an email along with a message to the registered email ID and the mobile number respectively.
CPC processes each e-filed return and generates intimation u/s 143(1). The department compares the data provided in the return by the taxpayer in addition to the records available with the CPC and generates an intimation under section 143(1). The intimation also carries the detailed calculation of the tax as computed by the taxpayers and the income tax department. The whole process generally takes 30- 45 days from the day of e-verification or the receipt of ITR-V by the CPC.
Status post the ITR processing
Taxpayers are required to decode the ITR intimation. Following are three possible scenarios that the taxpayer may need to understand :
Refund determined: If the return filed by the taxpayer is found to be accurate and has a refund claim, the refund is issued to the taxpayers. Generally, the credit of refund process takes about 20-45 days from the date of e-verification of the income tax return. However, if the acknowledgement has been sent physically to the CPC, it may take a longer time.
Demand determined: If any discrepancy is found in the taxes paid or the credit claimed, the department issues a demand intimation. The demand has to be paid within a stipulated time mentioned in the intimation under section 143(1).
No demand No refund: The situation where the department accepts the information provided by the taxpayer and gives a green card then the status of the ITR processing turns to ‘No demand No refund’. It means there is no interest or tax payable or refundable by/to the assessee.
Processing of ITRs through System:
Consequent upon the changes in the accounting process, now returns are being processed through the system and assessee are getting notices. In most of the cases, assessee is facing issues arising of this process as under:
Return is processed with some additions which are taken due to the wrong generation of “xml” files.
Taxable income is generated twice due to some technical issue. Here, business income is processed double than actual. Rental income is taken at 100% to the person who is a part owner of the property but assessed at 100%.
TDS credit is deprived to the assessee which are not appearing in form 26AS as on the date of filing of ITR and credit is not allowed after the returns are processed. Various times rectification is not processed with corrected data.
Computation as per utility does not match with the processed return.
Assessee is not allowed to file rectification request in case income is changed in the rectification.
Mistakes are not being rectified and assessee get reminders for outstanding demand.
Bank accounts were attached under section 226(3) of the IT Act and AO is not accepting letters and representations from the assesses, as the system is not allowing to rectify.
These issues when raised before the help desk or “E-nivaran” tab in the e-filing web site, most of the time we get vague answers and never get the final expected result and the ticket gets closed.
Sometimes, we are asked for not quoting assessment year and then the ticket gets closed. Here, one should know that without quoting assessment year the ticket is not generated.
Now we have following suggestions for this.
1. Let the processing be done as per the present way and allow the assessee to file rectification by filing of revised xml (as per the present case).
2. In case the return is processed under section 154 the way assessee filed then he will accept the case and do the needful.
3. In case, rectification is not processed as per expected xml filed by the assessee ,then the assessee should be allowed to file tax computation sheet in pdf form. This return will be checked manually by departmental CPC staff before processing and correct xml so that the return is processed as expected.
Most of the tax consultants and Chartered Accountants are knowledgeable and conversant with Income Tax Laws. At present most of their time is spent on following up, filing and generating xml where they are not convergent and make repetitive mistakes. It ultimately affects assessee and the Income Tax Department.
Further, Government is advertising that Individuals can file their ITR without taking help of tax consultants. But in reality, most of the time either the assessee file their returns themselves or are taking help of Cybercafe operators who does not understand anything about Income Tax Act.
This is also causing frauds and illegal allowance of deductions and exemptions for which they are not entitled for.
This results in heavy tax demand to the assessee who are then approaching tax consultants for rectification. But my personal experience says that these returns cannot be rectified online as most of the time some of other income head is not properly calculated and thereby not allowing to file rectification. Even if it is filed, the revised processed returns do not change and we don’t get returns properly rectified.
We, therefore, request to transfer such cases to Assessing Officers who are most of the time not taking action immediately, resulting in making assessee defaulter on account of false demand.
Consequently, the hypothetical and unreasonable Tax Demand is never being reduced and lots of physical notices are being sent to the assessee which is a heavy cost to the Department and against the national interest of the country also it is violating the principles of Natural Justice.
Frequently Asked Questions
My income tax refund is not processed. How do I escalate this?
If you have filed your income tax return and not received income tax refund within a reasonable time, first confirm if you have verified your income tax return online or offline. ITR filing is incomplete and is not processed till it is e-verified. In case ITR V is verified, you can follow up with CPC on their helpline numbers 1800 103 4455 (or) +91-80-46605200 from Monday to Friday 8:00 am to 8:00 pm. In case of refunds of previous years, you need to write a letter to the Assessing officer of your jurisdiction stating reasons for delay / non receipt of refund.
How to check income tax refund status ?
Please login to e filing website,using PAN, password, DOB and captcha. Go to “My account > refund / demand status”. A screen will open displaying the status.
What is an Income tax refund?
When your income tax paid is more than your income tax liability for a given year, the excess amount paid is refunded by the Income tax department. This refunded amount is known as “Income tax refund”
Do I need to file an income tax return to get the refund?
Yes, it is necessary to file an income tax return to claim the refund.
What are different Income tax refund status?
Income tax department processes the verified ITR after the same is filed. In case you have claimed a refund in the ITR, then there can be various status reflecting and the actions that your are required to take as detailed below:
Assessment year not visible in refund status- Please file the return as absence of AY means return filing is pending.
Refund paid- the refund should be received by you, either in your bank account or by a cheque as selected by you. In case of non receipt of cheque, please track your speed post reference number on TIN website.
Not determined– please confirm if your return is filed and duly verified.
No demand no refund– If as per IT department, you are not eligible for refund , then “no demand no refund “ will be reflected. An intimation u/s 143(1) will be issued showing comparison of their calculation on your registered email. Review the comparison and rectify the return if required.
Refund unpaid– This status gets reflected due to error in bank or address details. Please update the correct details on income tax portal and raise a refund reissue request
Refund determined and sent out to the refunding banker- it means a refund request is generated and sent for processing. Refunds should be received within a few days.
Demand determined– it means the IT department has rejected refund and raised a demand u/s 143(1). Intimation will be received with the calculation of tax liability as per IT department either on registered email ID or through physical notice.
Contact Jurisdictional assessing officer – This means the IT department needs some clarification. Contact the AO of your region.