The Hindu Business Line : `Refund must be made within 30 days of filing of return'

Chennai March 8 A common problem that the Budget could have addressed, but did not, is of delayed income-tax refunds, frets Mr Prakash Hegde, Principal Consultant, PricewaterhouseCoopers.

"Statutorily, an intimation of assessment and tax refund is to be issued within one year from the end of the financial year in which the tax return is filed. A situation of non-payment/delayed payment of refund entails interest from the Government, which can be an avoidable burden on the exchequer," explains Mr Hegde, in an interaction with Business Line. Here's more:

Why does the delay occur?

Reasons are many. Delays can be intentional or unintentional, or just flowing from the bureaucratic way of functioning; at times, the taxpayer too is to blame.

An incorrect adjustment of taxes or budgetary constraints, or not sending advice to the banker is quite common.

What are the remedies now available to taxpayers?

At present, an application to the Grievance Cell for tax refunds appears to be effective and result oriented. Under the Income Tax Ombudsman Guidelines, a taxpayer is entitled to make an application to the Ombudsman to redress the issues such as delay in issue of refunds etc. It is expected that the aggrieved taxpayers might use this mechanism to resolve the pending refunds.

Do the woes of taxpayers get sympathetic attention?

It seems so. Recently, a refund banker's scheme was floated on pilot basis in Delhi and Patna. Soon the project is likely to be extended to other cities.

Additionally, the existing method of ECS for the refund is planned to be extended to more cities. These measures will, no doubt go a long way in reducing the delay.

Any suggestions for improvement of the refund system?

In the case of a tax demand from the taxpayer, it is common for the taxmen to issue notice, demand and collect the same within 30 days.

Applying the principle of equity and considering the resources of the exchequer, issuance of refund should be made within 30 days of filing of the return thereby reducing the anxiety of the taxpayer.

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