Facing Delay In Income Tax Refunds? Here Is What You Need To Know

A delay in income tax (IT) refund can be for various reasons, so it is important to understand the reasons and how to request a refund reissue.
Income Tax
Income Tax

If you had filed your income tax returns (ITR) by the 31 July deadline, you would have got refunds by now if eligible. However, the refund may not come as expected in some cases, and there could be various reasons for the delay.

“If your refund has been disbursed, the status will indicate, ‘Refund is already credited to your bank; please contact your bank.’ You can also view the account number where the refund has been credited and the payment date,” says Naveen Wadhwa, vice president of research and advisory at Taxmann.

Reasons For Not Receiving Refunds

However, there are a few reasons why the refund may not have been processed yet. “The income tax refund is issued after the Centralized Processing Centre (CPC) processes the Income Tax return. To receive the refund, taxpayers must designate a pre-validated bank account. There could be various reasons for not crediting the refund amount to the bank account,” says Wadhwa. Let us take a look.

Wrong Bank Account Number Or Routing Number: 

“This is the most common reason for a refund not reaching the intended recipient. Make sure to double-check the bank account number and routing number you entered when filing your tax return or requesting a refund," says Sanjiv Bajaj, Jt. chairman & MD, Bajaj Capital.

The Bank Account Is Closed: 

If the bank account you provided is closed, the refund will be returned to the IRS. “You will need to contact the IRS to re-issue the refund to a different account,” says Bajaj.

An Incorrect Name On The Bank Account: 

The name on the bank account must match the name on the tax return exactly. If the names do not match, the refund will be returned to the income tax department (ITD).

Fraudulent Activity: 

In rare cases, refunds may be delayed or denied due to fraudulent activity. “If you believe that your refund has been delayed or denied due to fraud, you should contact the IRS immediately,” says Bajaj.

Processing Delay: 

“The IRS is currently experiencing a high volume of refund requests, which may cause some delays. If you have filed your tax return and requested a refund within the past few weeks, it is possible that your refund is still being processed. You can check the status of your refund on the IRS website,” says Bajaj.

If you have checked all of the above and are still unsure why your refund has not reached you, you should contact the income tax department (ITD) for assistance.

Here Is What You Can Do

If your refund has not reached you due to a mismatch of account numbers, you can take the following steps to rectify the situation. “Check the bank account number and IFSC code you provided when filing your tax return. Make sure the numbers are correct and match the account number and IFSC code of your bank account,” says Bajaj. Contact your bank to verify that the account is still active and that there are no holds on the account.

The next step, says Bajaj, is to contact the IT department to request a refund re-issue. When you contact the ITD, you must provide them with your PAN (Permanent Account Number), the assessment year, and the refund amount. You can contact the IT department by phone, mail, or via their e-filing portal.

Steps On How To Request A Refund Re-issue Through The ITD e-Filing Portal:

· Go to the ITD e-filing portal and log in to your account.

· Click on the “My Account” tab.

· Click on the “Service Request” link.

· Select the “Request Type” as “New Request” and Select the “Request Category” as “Refund Re-issue”.

· Enter the required information, such as your PAN, assessment year, and refund amount.

· E-verify your identity.

· Submit your request.

The ITD will review your request and issue the refund to the correct account immediately.

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