Got your refund, but is it less than expected?

You finally get the refund for last year, but to your surprise find that the refund credited is a lot less than you had filed your return for. We list out the reasons why this could have happened and suggest next course of action today.

If you did’nt get any refund – find out why – here.

What could have happened?

  • It’s possible that the Department has adjusted your refund for this year against demand outstanding of previous years, Section 245 of the Income Tax Act allows AOs to adjust one against the other.

  • There is also a possibility of a tax credit mismatch, meaning that the tax credit you have claimed does not match with the TDS entries on your Form 26AS.

What must you do next?

For adjusting refund against outstanding tax demand :

  • Please check your inbox for an email from the Income Tax Department explaining the difference in refund amount paid back.

  • Check the outstanding tax demand on the I-T Department website

  • Go the the Income Tax Department website

  • Login to your account

  • Go to My account > Refund/demand status

  • You will be able to see demand outstanding under “Pending Actions” head

Not sure how this demand got calculated or don’t agree with the I-T Department?

Please send us the intimation that you have received to support@cleartax.in. and a member of the CA team shall review your notice and advise you on the next steps.

If you agree with demand, file a rectification for the year in which the tax due has been adjusted.

For tax credit mismatch:

  • Please check your inbox for an email from the Income Tax Department explaining the TDS mismatch.

  • Check tax credit mismatch on the I-T Department website:

If you agree with the tax credit mismatch, file a rectification for the year in which there was a mismatch. Note that online rectification can only be filed for the last 5 Assessment Years. Read more about rectification here.

How do you resolve unmatched entries?

  • Compare your ITR against Form 26AS to understand where there might have been a mistake.

  • Ask your deductor to reconcile and revise the TDS return filed by them to correct discrepancies.

  • Once the deductor revises the statement and submits to the department, you can request them to update your TDS details.

Feel free to reach out to us at support@cleartax.in if you need help drafting a response to the AO or have questions about Section 245 or tax credit mismatch. We are happy to help!

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