Can you claim income tax refund for previous years even after revised ITR deadline is over? Difficult but possible However, it may happen that the taxpayer received excess income in the previous year and paid taxes accordingly. Now, the taxpayer needs to return the excess income received. Can he also claim income tax refund on it?
Many people are awaiting their income tax refund for the income tax return (ITR) filed this year i.e., FY 2023-24 (AY 2024-25). But can an individual ask for an income tax refund from the Income Tax Department for excess tax paid in the past year?#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} Such a situation may arise if a taxpayer received excess income from an organisation in a previous year and paid income tax accordingly. However, now the organisation wants the excess payment returned. This means the taxpayer has to return the excess income (for which tax has also been paid). Consequently, the taxpayer may want to claim a refund from the Income Tax Department.
Chander Talreja, Partner of Vialto Partners, a Global Mobility company says, "One would need to understand the entire transaction (i.e. the nature of excess income and the rationale behind the excess taxes paid and now the recovery of the same). Assuming all the parameters are cleared and there is a legitimate reason to do, the income tax laws provides an individual to file a revised return under Section 139(5) of the Income Tax Act, 1961, to correct an omission or error in such cases. Currently, the due date to file a revised return is December 31 of the relevant assessment year. However, if the due date to file a revised return has expired, one may consider applying for a tax refund through a condonation request under Section 119(2)(b) of the Income Tax Act. The section authorises income tax authorities to accept claims for exemptions, deductions, refunds or other reliefs beyond the stipulated timeline, provided the specified conditions are met. However, processing of tax refund claims is at the discretion of the tax authorities - they may either approve or deny the application following a thorough audit."
Remember, the last date to file the revised return was changed in the Budget 2021. The change was effective from FY 2020-21 (AY 2021-22). Till FY 2019-20 (AY 2020-21), the last date to file a revised return was March 31 of the relevant assessment year.
Abhishek Soni, CEO of Tax2Win.in, an ITR filing site, says, "An individual can claim an income tax refund for excess tax paid if the time limit to file a revised income tax return has not expired. However, if the deadline to file a revised return has expired, then income tax laws allow taxpayers to file a condonation request. This condonation request can be filed only in genuine hardship cases as per the circular. A 2015 circular of the Income Tax Department specifies the criteria taxpayers must satisfy before filing the condonation request."
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Time limit to file condonation request
The income tax department's circular on filing condonation requests applies to filing tax refund claims and carrying forward or set off of losses under the Income Tax Act. The request must be filed within a specified time limit. According to the circular, "No condonation application for claim of refund or loss shall be entertained beyond six years from the end of the relevant assessment year for which such claim or application is made."Soni says, "This would mean that if the excess tax on the excess income was paid for, say, FY 2017-18 and ITR was filed in AY 2018-19 (last date to file revised ITR being March 31, 2019), then condonation request can be filed till March 31, 2025, to claim tax refund of taxes paid. An income tax refund will be granted, provided the income tax department accepts the taxpayer's condonation request."
The circular states that a belated application for the supplementary claim of refund (claim of additional amount of refund after completion of assessment for the same year) can be admitted for condonation provided the conditions stated above are fulfilled along with those mentioned below.
a) The income of the assessee is not assessable in the hands of any other person under any of the provisions of the act
b) No interest will be admissible on belated claim of refunds
c) 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.
How long will it take for income tax department to respond?
The circular further specifies that the condonation application should be disposed of within six months from the end of the month in which the application was submitted. Talreja says, "Suppose a taxpayer files a condonation request in August 2024, the income tax department is required to reply to the taxpayer communicating its decision on the request by end of February 2025." #sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}This story originally appeared on: India Times - Author:Faqs of Insurances
