Expecting A Tax Refund? Check Your Bank And TDS Details Before Filing ITR

Taxpayers usually become eligible for a refund when the tax already paid or deducted during the year exceeds their actual tax liability.

However, incorrect bank details, mismatches in tax records, pending demands, or failure to verify the income tax return (ITR) can delay the refund or prevent it from being issued.

Check Bank Details, TDS, And Outstanding Demand

Before filing, taxpayers should check whether the bank account selected for receiving the refund has been pre-validated on the income-tax e-filing portal. The account should be active, while the account number, IFSC, and name of the account holder should be correct.

“First, make sure the bank account you want the refund credited to is pre-validated on the portal, and that the name on that account matches your PAN exactly; mismatches are one of the most common reasons refunds bounce back,” says Shourya Garg, advocate, Garg & Garg Tax Associates.

Taxpayers should also compare all tax deducted at source (TDS) entries in Form 26AS and the Annual Information Statement (AIS) with their salary certificates, interest statements and other income records before filing. A mismatch between the credit claimed in the return and the tax department’s records may hold up processing.

The Permanent Account Number (PAN) should be linked with Aadhaar, as an inoperative PAN can block the refund. Taxpayers should also check the portal for outstanding demands from previous assessment years. The department may adjust the current refund against an unpaid demand under Section 245.

The return must be e-verified within 30 days of filing. An unverified return is treated as invalid and will not be processed for a refund.

What Can Delay Your Refund

Refunds are often held up because the bank account has not been validated, the IFSC is wrong, the account has been closed, or the name does not match the PAN records. An old tax demand or a mismatch between the return and AIS can also delay payment.

Once the return has been processed, taxpayers should check the refund status for the relevant assessment year on the income-tax e-filing portal. The status may indicate whether the refund failed because of a bank validation problem or was adjusted against an outstanding demand.

For a bank-related failure, taxpayers should correct and re-validate the account details and submit a refund reissue request. Where a Section 245 notice has been issued, they should respond within 30 days by agreeing with the demand, disputing it or paying the amount separately.

“If there has been no update at all for sixty to ninety days with no visible reason, it is worth raising a grievance through the portal or Centralised Public Grievance Redress and Monitoring System (CPGRAMS),” says Garg.

Taxpayers may also be entitled to interest under Section 244A if the refund is delayed beyond the applicable processing period.

FAQs

1. What should taxpayers check before filing to avoid refund delays?

They should pre-validate their bank account, reconcile TDS with Form 26AS and AIS, check pending tax demands, link PAN with Aadhaar, and e-verify the return.

2. What should taxpayers do if the refund fails because of bank details?

They should correct and re-validate the bank account on the e-filing portal and then submit a refund reissue request.

3. Can an outstanding tax demand reduce the refund amount?

Yes. The Income Tax Department may adjust the refund against an unpaid demand after issuing an intimation under Section 245.