Income Tax Refund: New Income Tax Portal errors resulting in reduced tax refund amounts for many


Did you receive a lower tax refund than the one you claimed when filing your income tax return (ITR) for the 2020-2021 fiscal year? If so, then you are not alone; several tax filers this year saw their bank accounts credited with lower tax refund amounts. This is because the new income tax portal did not take into account the full tax credit available in the 26AS form for these filers.

The reason given by the income tax service in the notice of formal notice for giving a lower tax refund than the one claimed is:
The 26AS form does not contain / does not contain a partial amount of TDS compared to the TAN mentioned in annex TDS 1 / TDS 2 / TCS.

However, the TDS amount claimed by these RTI filers is equal to the amount shown in their respective Form 26AS. The 26AS form itself is downloaded from the income tax portal. It seems that the data displayed on a section of the portal is not synchronized with / is not fully taken into account by the processing software.

Abhishek Soni, CEO of on an RTI filing website, said, “We have seen over 10 cases where full TDS credit, as shown in Form 26AS, is not granted by the tax department. income taxes at the time of processing the ITRs. as a result, individual taxpayers get a lower income tax refund than what is actually owed to them. ”

Tax experts and chartered accountants say such a situation is rare and does not normally occur during RTI’s reporting season. Soni says: “However, this year there have been cases where, at the time of filing the income tax return, the pre-filled data fetched from the new income tax portal shows a mismatch between the amount Available TDS and an individual’s PAN, i.e. the full TDS. as reflected in Form 26AS is not retrieved / pre-filled in the RTI. Even though the TDS amount is corrected at the time of filing the RTI, it appears the tax department processes the RTI using pre-populated data rather than information reflected in the 26AS form. ”

Reason for the mismatch in the notification notice

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TDS amount available in form 26AS

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As shown in the screenshots above, according to the taxpayer’s Form 26AS, the total amount of TDS deposited on the individual’s PAN for the 2020-21 fiscal year is Rs 4,532.31. This amount is the same as that claimed in the individual’s RTI form. However, the tax credit granted by the income tax service when processing the RTI is Rs 2,246. The amount of the TDS credit refused by the tax authorities is Rs 2,286, which is almost 50% of the TDS deposited. against the individual’s PAN. The point here is that the TDS credit was denied despite showing up on the individual’s 26AS form, which should not normally happen. This is because the 26AS form is supposed to be the TDS information available from the income tax department itself.

Here’s a look at three examples of full refunds refused by the tax department and what taxpayers can do to rectify the situation.

CASE I: An income tax refund of Rs 2,286 is refused by the income tax service

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Case II: Income tax refund of Rs 13,106 refused by the income tax service

Here, the taxpayer’s 26AS form shows that the total TDS deposited / credited to the PAN is Rs 20,365, however, the TDS credit given by the income tax department (after processing the ITR) in the notice formal notice is Rs 7,259. Thus, a tax credit of Rs 13,106 is refused by the income tax service which has resulted in a decrease in the tax refund.

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Case III: Income tax refund of Rs 9,707 refused by the income tax service

Here, the total amount of TDS deposited on the PAN for fiscal year 2020-21 is Rs 48,331, however, the amount of TDS credit granted by the income tax service is Rs 38,624. Thus, a credit tax of Rs 9,707 is denied by the income tax department.

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What can taxpayers do in such a situation?

“If the income tax refund granted to you is less than what you claimed due to the denial of the TDS credit, as stated in Form 26AS, then in such a situation, a person will have to file a claim for rectification under Section 154 to claim the balance tax refund, ”Soni said.

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