We all know that nothing is certain about this world except our death and taxes. There are many who pay taxes and find it a tedious task to do whereas there is another world of tax payers who pay tax in time and look at in a very positive manner.
Income Tax return that is filed at the end of each fiscal year is a process by which you show taxes that are paid on your income. Sometimes you would end up paying more taxes than you should be actually paying. This is what generates a tax refund which the government pays back after you file them.
Tax filing, however, has become easier and simpler process through the new e-filing method which is also known as electronically filing option that is available for tax payers. Anyone who is liable to pay taxes can file their returns electronically. Tax should be paid by everyone who earns more than 5 Lakhs as their income, people who own assets in abroad and those whose income needs to be audited.
E-filing is much more beneficial compared to the physical filing of returns manually. E-filing is considered a more secure way of filing returns and offers a good amount of flexibility to the person filing a return. You can e-file returns from anywhere and anytime by simply making use of the internet. The process to e-file return does not take so long and is accurate and also automatic. Therefore e-filing is no more a hectic and tedious process.
Let us have a look at the cases where you may be able to get a refund from the government. The excess tax may have been paid because of the following reasons:
1. You have not filled Form 15G in case of fixed deposits
In the case of Fixed Deposit taxes are deducted from the interest generated and if you did not fill Form 15G the banks deduct tax at source. However, it does not mean that you have no liability or any interest on FD but you will have to pay it at the end of that financial year. At the end of each financial year, you need to add interest earned on the FD to income and ensure that you pay taxes as per the tax slab you would fall into. In this case, if your total tax liability is less than the tax saving done in a year’s time you stand eligible for an income tax refund.
2. Your employer does not factor in your savings because you did not declare it in the beginning itself
All the employees are expected to fill up an investment declaration form to their employers in order to show the saving; however, there are not many people who fill this form to show their saving as they themselves are not certain about their savings. Therefore the company ends up calculating taxes liability based on their earned income and proposed investment for tax savings.
This is what increases the outflow, however, if you are able to invest in various tax saving instruments before the end of the financial year this should result in tax refund as you had paid more taxes earlier.
3. You earn as Free-lancer and your clients deduct 10% TDS at source
When you are working as a freelancer the clients deduct 10% as TDS which is paid against your income. Sometimes it may also happen that by the end of the year you may have paid more tax than you actually should and this can make you eligible for a refund.
4. The process of Tax-Filing and obtaining refunds
In order to file your income tax, it is not necessary that you should be a CA, you can file tax on your own before 31st July, once you e-file your taxes an acknowledge receipt is generated. You need to take a print and sign the document and send it across to the income tax department. The address is mentioned in the document. You can also e-verify your returns online in order to ensure that you have paid taxes in time. It is very important for online tax payers to register their digital signature, without which the e-filing procedure is not considered complete.
As soon as the income tax department receives your acknowledgment it will do its own check on the authenticity of refund you have claimed and then will proceed with the refund. The refund is normally issued within 3-4 weeks although it can take even up to 4to 8 months. The refund is directly deposited in the account, however; in case of any problem, the IT department may also send a cheque on the given address. It is mandatory for people to link up their PAN with Adhaar Card without which they will not be able to file their returns.