Economy

I-T refunds up to ₹5 lakh to be released immediately

Our Bureau New Delhi | Updated on April 08, 2020

The Finance Ministry has decided to issue income-tax refunds up to ₹5 lakh immediately. There is also a plan to release indirect tax refunds to small businesses.

“In the context of the Covid-19 situation and with a view to provide immediate relief to the business entities and individuals, it has been decided to issue all the pending income-tax refunds up to ₹5 lakh, immediately. This would benefit around 14 lakh taxpayers,” a statement issued by the Central Board of Direct Taxes (CBDT) said.

It has also been decided to issue all pending GST and Customs refunds which would provide benefit to around 1 lakh business entities, including MSMEs. Thus, the total refund granted will be about ₹18,000 crore.

Harpreet Singh, Partner with KPMG said, “Expediting refunds to MSMEs is an intelligent move, as tax officials only need to follow the procedures, which are already in place to release the money, due to the industry.” Further, refunds can be granted online, without human intervention.

Income-tax refund arises when taxes paid are higher than the actual tax liability (including interest). It could be in the form of advance tax, self-assessment tax, tax deducted at source, foreign tax credit etc. There is no separate procedure to claim an income tax refund. One can claim tax refund by filing the return of income in the usual manner. A taxpayer is supposed to ensure that the return is electronically verified through Aadhaar number OTP, EVC generated through bank account or physically verified by posting the signed ITR-V (acknowledgement) to Centralised Processing Centre (CPC) within 120 days of filing the return. Normally a taxpayer has a time limit of 120 days, from the date of return filing, to verify his returns. The earlier one gets the verification done, the earlier the CPC will process one’s returns. Once the returns are processed by the CPC at the primary level for arithmetical errors etc, refund will be issued to the taxpayer.

Published on April 08, 2020

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