Filing of Income Tax Return

• The refund process begins when a taxpayer files their Income Tax Return (ITR) and declares that excess tax has been paid.
  
• The return must include accurate details of income, deductions, and taxes paid like TDS, advance tax, or self-assessment tax.
  
• A valid and pre-validated bank account must be mentioned for refund credit.
  
• Filing the return within the due date helps in faster processing.
  
• Refund claim is auto-generated during return processing if applicable.
  

Verification of ITR

• After filing, the return must be verified within 30 days either electronically or by sending a signed ITR-V to CPC.
  
• Refund processing will not begin unless the return is verified.
  
• E-verification can be done using Aadhaar OTP, net banking, or digital signature.
  
• Successful verification triggers the next stage of processing.
  
• A confirmation is sent to the taxpayer once verification is complete.
  

Processing by CPC

• The return is processed by the Centralized Processing Centre (CPC) under Section 143(1).
  
• CPC cross-checks income, TDS, deductions, and taxes paid with system records like Form 26AS and AIS.
  
• Refund is calculated as the excess of total tax paid over the tax liability.
  
• An intimation is issued summarizing the computation and confirming refund eligibility.
  
• Refund may be reduced if adjusted against any outstanding tax demand.
  

Credit of Refund to Bank Account

• Refund is credited directly to the pre-validated bank account provided in the ITR.
  
• Only electronic transfer is allowed; no cheques are issued.
  
• Bank account must be active, in the taxpayer’s name, and linked to their PAN.
  
• Refund may include interest under Section 244A if delayed beyond a prescribed period.
  
• An SMS and email alert are sent once the refund is issued.
  

Tracking Refund Status

• Refund status can be checked on the income tax e-filing portal or through the NSDL refund tracking page.
  
• Status updates include “Return Processed,” “Refund Issued,” “Refund Failed,” or “Adjusted Against Demand.”
  
• Delays may occur due to incorrect bank details, PAN mismatch, or verification issues.
  
• In case of failure, taxpayers can request refund reissue online.
  
• Timely filing, accurate details, and compliance ensure smooth refund processing.