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Thursday, July 2, 2015

How to Claim Income Tax Refund of Earlier Years

In India, most of us still file Income Tax Returns just to claim refunds of Taxes which are deducted by the payer of our Income i.e. Banks, Governments, Insurance Companies etc or taxes paid extra by us either at the time of Self Assessment or Advance. These taxes are refunded after filing of Income Tax returns.Now most of us even being well educated forget to file the Income Tax return or we don't have knowledge of the process to get the Income Tax refund. Many of the cases are still pending and there are a lot of persons who have refund of Lakhs of rupees but are not being able to get the refund due to non filing of Income Tax returns.
Since at a particular Financial Year a return can just be filed for 2 years that is Previous year and a year previous to that year, thus refunds can only be claimed of maximum 2 years. At present refund of Income Tax can be claimed only of year 2013-2014 and 2014-2015. Now this has created a lot of difficulty for genuine cases where return of Income could not be filed. To remove the hardship faced, Income Tax department with its CIRCULAR 9/2015 [F.NO.312/22/2015-OT], DATED 9-6-2015 has issued the process by which Income Tax refunds can be claimed of those cases where Income Tax return is not yet filed.
Income Tax Refund

Now this process can be used to get Income Tax refund of Last six years i.e. of Financial Year 2008-2009, 2009-2010, 2010-2011, 2011-2012, 2012-2013 and 2013-2014. The condonation of FY 2013-2014 is of no use as ITR of this year can still be filed with Income Tax Department. 

PROCESS TO CLAIM REFUND OF THE YEAR OF WHICH ITR IS NOT FILED

1. KNOW THE VESTED POWER OF THE OFFICERS OF INCOME TAX- 

The first step in claiming the refund, would be to know the power of the Income Tax Officials. CBDT in its circular has divided the power in the following  way:

REFUND AMOUNT                              Power Vested With

Below Rs. 10 Lakhs                                  Principal Commissioner/Commissioner of Income Tax 

Rs. 10 Lakhs and below Rs. 50 Lakhs      Principal Chief Commissioner/Chief Commissioner of Income Tax

Above Rs. 50 lakhs                                    CBDT


  
2. APPLICATION FOR CONDONATION OF DELAY

After Selecting the relevant authority a Condonation application has to be filed to the same. A condonation application has to be disposed off by the relevant authority within 6 months of its filing.

3. POWERS OF THE OFFICER-

The powers of acceptance/rejection of the application within the monetary limits will be subject to Following conditions:

a.  It should be ensured that the income/loss declared and/or refund claimed is correct and genuine and also that the case is of genuine hardship on merits.

b. The Pr.CCIT/CCIT/Pr.CIT/CIT dealing with the case shall be empowered to direct the jurisdictional assessing officer to make necessary inquiries or scrutinize the case in accordance with the provisions of the Act to ascertain the correctness of the claim.

4. ACCEPTANCE AND PAYMENT OF REFUND

If the Authority accepts the application after due diligence and scrutiny and finds the correctness of the claims, an opportunity will be provided to file the return and claim the refund of Taxes.

5. SUPPLEMENTARY CLAIMS

A supplementary claim of refund (claim of additional amount of refund after completion of assessment for the same year) can be admitted for condonation provided other conditions as referred above are fulfilled. The powers of acceptance/rejection within the monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsJT/CsIT in case of returns claiming refund and supplementary claim of refund would be subject to the following further conditions:

i.The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act.
ii. No interest will be admissible on belated claim of refunds.
iii.The refund has arisen as a result of excess tax deducted/collected at source and/or excess advance tax payment and/or excess payment of self-assessment tax as per the provisions of the Act.

For the full circular regarding the Condonation of Delay in Filing Refund claims, visit the link below:








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