An income tax is a direct tax that an individual pays to the government. Most people find filing their income tax tedious, so much so that they procrastinate until the end of the financial year. Often, people file their taxes at the last minute, and some may even pay extra taxes to the government. If an individual has paid more tax than they are liable for, they are eligible for a refund of the excess amount they paid. Here is all you need to know about income tax refunds:
How to file an income tax return?
You can do your taxes or hire Chartered Accountants (CAs) to file your returns. If you are doing your taxes, use an income tax calculator to estimate the taxes payable. Then choose the ITR form that applies to you from the different types of ITRs. Fill in the required details, be it your personal or professional details or any deductions you claim. Check every field carefully before submitting it to the online portal. Once you have filed your taxes, you will get an acknowledgment slip. You need to sign the receipt and send it by post or use any online method to verify your return. From filing the form to the last process of verifying your returns, you need to be careful, or else your ITR process may remain incomplete. With a preliminary approach, you may not get claims if there are any income tax refunds.
What are the reasons one may have paid excess taxes?
It is essential to file your taxes patiently, from picking the correct Income Tax Return (ITR) form to declaring all the claims needed. Here are some mistakes one may have made while filing their income tax returns:
No declarations in the investment declaration form
If employed, your company will ask you to fill up an investment declaration form that reflects your investments and their tax-saving implications for a given financial year. The structure is provided, so the company knows how you plan to save taxes in the coming financial year. Most people procrastinate and do not fill in precise details about their tax saving plans. However, since most people do not have a plan beforehand, they procrastinate until the end of the financial year. Unaware of your goals, the company deducts taxes per the slab. However, if you have made investments in tax-saving instruments before the financial year ends, you can claim a tax refund for the taxes that were deducted previously by your company. To avoid this scenario, use an income tax calculator and look for tax-saving instruments that can benefit you at the beginning of a financial year.
Failing to submit form 15G
If you have a fixed deposit (FD) and forgot to fill the form 15G, the taxes applicable on the interest of your FD will be directly deducted at the source. If your tax liability is less than the tax savings at the end of a financial year, you can claim a refund on the taxes levied on your FD returns.
TDS is a type of direct tax which is deducted from revenues. If you are a consultant or a freelancer, the clients you work for may deduct 10% of TDS from their payments. If TDS was removed from your payments and at the end of the financial year, you have paid more taxes than you were liable for; you are eligible for an income tax refund.
What if one forgets to claim their tax refund?
Use Form 30 to claim your income tax refund for a financial year. If you have forgotten to claim your refund, you can do it within one year from the last day of that relevant assessment year. However, you may have to pay the penalty for filing the late refund claim. Once you have made the request, an income tax commissioner will judge and analyze your request. They will decide if your lawsuit will be accepted or not. Please keep checking the status of your claim refund at regular intervals until you get it.