Delay in receiving tax refund is a common phenomenon in India. If you are waiting for your tax refund for quite a long time, there can be valid reasons for the same.
Most of the tax returns at present are processed within a period of three weeks. Today many filers receive their refunds even earlier. Some common errors or oversights cause delay in your tax refund.
Common reasons for the delay:
1. When the tax return is incomplete – A common reason for delay in tax return processing, is absence of necessary information in the return. Failure to provide the basic information, like the Social Security numbers of dependents, can cause delay in the refund process. Missing forms or schedules also result in delay.
2. Filing an early or late return – You may be eagerly waiting for a refund, but sometimes filing an early return goes against you. Changes to the tax code or procedures operate at the last moment; as such refunds can be delayed in the tax software. Filing at the last moment can also result in delay, if you file on paper, due to mistake in manual filing at that moment. Late filing also increases the possibility of getting a delayed refund. Sometimes in late filing, refund can be delayed for a long time due to IRS verification of information to tracks whether it is a genuine or a fraudulent return.
3. Correcting a tax return – If you require changing your tax return after filing it, you have to prepare an amended return. Amended returns cannot be filed through e-filing. They are to be mailed to the IRS. Processing an amendment takes about 12 weeks time starting from the date the return is received.
Amending does not affect the original refund. The IRS system also spots the minor mathematical mistakes while processing a return and delays the refund.
How to avoid such Delays?
One has to make sure that everything is correct in the return filed by him. Checking the spelling of all details like names, addresses, etc. as well as giving sufficient information will check the delay in the refund process. One may have plans for using his tax refund for a vacation or for a gift. Delay in receiving refund within the due date can result in mental agony.
If you do not receive your tax refund within a reasonable time, you can go to the tax department to follow up the refund or can write a letter to the officer. However, if no steps are taken by the concerned officer, the tax payer can apply to the jurisdictional Commissioner of Income Tax.