Income Tax Refunds

A taxpayer has to pay his income tax on a yearly basis. When a taxpayer-paid his tax amount, which is more than his tax liability then he will get a refund from the Income Tax Department, it is known as Income Tax Refund.

For claiming your income tax refund, you have to file your income tax return in the usual manner. You can either verify your return electronically via using Aadhar OTP or through bank account details or you can physically verify it and post it to Centralised Processing Centre (CPC) within 120 days of filing the income tax return.

If you have received a refund, then you might have noticed that the amount of refund received is higher than the amount of claimed refund. This is because you have received the interest on your refund. If your income tax refund is 10% or more of your income tax paid then it is mandatory for the income tax department to pay interest on your tax refund.

According to Section 244A of the Income Tax Act, 1961 interest on an income tax refund is provided at the rate of 0.5% per month or part of the month of the refund amount.

You can check the status of your Income Tax Refund by logging on to the income tax e-filing website of the income tax department. Then click on My Account and then click on Refund/ Demand Status.

 

Types of Income Tax Returns(ITR) as per Assessment Year 2020-21

The Central Board of Direct Taxes has recently announced 7 Income Tax forms till date viz. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7.

 

The details of these ITR forms were given below:

1. ITR 1 or SAHAJ

If a Resident Individual receives his incomes from one or more of the following sources, then he should file ITR1

• Income from Salary/Pension
• Income from One House Property (not allowed form carried forward losses)
• Income from Other Sources (except winning income) and
• Agricultural Income up to Rs. 5,000/-.

Note: Total income should not exceed Rs. 50 lakh.

2. ITR 2

If a Resident Individual or HUF receives his incomes from one or more of the following sources, then he should file Income from

• Salary/Pension
• Income from House Property
• Income from Other Sources
• Agricultural Income is more than Rs. 5,000/-
• Income from Capital Gains
• Foreign Assets/Income

Note: Total income should be more than exceed Rs. 50 lakh.

3. ITR 3

If a Resident Individual or HUF earn income from Business or Profession, then he should file this ITR.

4. ITR 4 ir SUGAM

If a Resident Individual, HUF or Partnership Firms (excluding LLP) earn income from Business or Profession and opted for Presumptive scheme under section 44AD, 44ADA and 44AE, then he should file this ITR.

Note: The annual turnover should not exceed Rs. 2 crores.

5. ITR 5

This form is for Firms, LLP, AOP, BOI, AJP, the estate of Deceased, Business trust, and investment fund.

6. ITR 6

This form is for Companies other than those who avail exemption u/s 11.

7. ITR 7

If a person furnish return u/s 139(4A), 139(4B), 139(4C), 139(4D), 139(4E) or 139(4F), then he is required to file his ITR by using this form