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Income Tax Refund: The Income Tax Department has recently issued a circular reducing the time limit for completing the process of filing a claim for tax refund from six years to five years. Which can be claimed for refund of old returns up to five years after the last date of filing returns for that financial year. After this the taxpayer will have to forfeit his refund money. Till now, up to six years were given to claim old refunds even after the last date for filing returns had passed. To reduce the backlog of refund cases, the government has issued a circular to reduce the time.
Decision taken to reduce old pending cases
The Central Board of Direct Taxes has issued a circular to reduce the backlog of pending refund cases, assist taxpayers to pay tax on time and claim refunds on time. The current circular issued by the Finance Ministry states that the time limit for applying for set-off or carry-forward or claiming refund has been reduced under section 119(2)(b). Income Tax Act. All circulars issued earlier by the Central Board of Direct Taxes in this regard i.e. regarding delay waiver have been cancelled. The taxpayer has to furnish the details with more accuracy to claim the refund. The time to claim refund will now be five years instead of six.
If you don’t claim for five years…
As a result taxpayers have to file their claim while filing their return or within the prescribed time limit to claim their refund. Besides, the rules related to this will also have to be strictly followed. Earlier, the taxpayer was given more time to claim the refund. Now the Income Tax Department also wants to reduce the backlog of refund cases. Therefore reducing the time limit for claiming refund has put more responsibility on the taxpayer. The taxpayer must submit all the required documents while claiming the refund. Refunds pending for the last five years can be claimed. No refund will be given after this.
Necessary documents for refund will have to be submitted to the Income Tax Office. In future also, if the taxpayer does any economic or financial transaction, then all the documents related to it will have to be kept ready. Taxpayers who fail to do so will have their refund money confiscated. By proposing changes in the policy, the government has indicated that the government is committed to increasing tax revenue. This decision has also been taken with the aim of making the functioning of the Income Tax Office more effective and efficient.
As a result of this decision, taxpayers will also have to keep documents related to their refund claims ready. Taxpayers will also have to keep their records updated. The government expects taxpayers to deposit their taxes on time and receive refunds on time. The delay will be condoned only after considering the circumstances in which the claim is pending and the amount claimed.
