The tax department will not reimburse you for income tax of this amount

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After your income tax return (ITR) has been processed, you may receive a warning notice from the Income Tax Department. The notice of intimation informs whether you have an income tax refund due or not. In the event that an income tax refund is due to you according to the calculations of the Income Tax Department, it is usually credited to your bank account within a few weeks. However, keep in mind that if the amount is less than Rs 100, the income tax refund amount will not be credited to your bank account.

This income tax refund amount will be adjusted based on future income tax refunds. So, if you have a refund amount due next year, this year’s pending small refund would be added to it, and it would be credited to your bank account if the total amount exceeds Rs 100. Otherwise, if you are required to pay taxes in the next fiscal year, you will get a credit for a small pending amount and you will have to pay the net amount after deducting this past refund credit.

Abhishek Soni, CEO, Tax2win – an RTI filing website says: “According to the government press notice dated 5th January 2012, requests under Rs 100 would not be enforced but subject to adjustment against the future income tax refunds.Practically, it has been found that the amount of income tax refund less than Rs 100 is not processed and credited to the individual’s bank account by the service of income tax.”

The Income Tax Service advises individual taxpayers of any income tax refund or assessment by means of a Notice of Intimation, Section 143(1) of the Income Tax Act 1961 Income. This notice of intimation is sent to you once you have filed and the verified ITR is processed by the income tax department.

It is important to note that if there are tiny income tax assessments pending before the tax return is filed, they must be paid before the ITR is filed and verified.

For example, your self-assessment contributions after calculating your total income tax contributions is Rs 75. In such a scenario, you need to deposit Rs 75 first and then deposit an ITR.

Reason for the publication of a press note by the government

The main reason for the release of a press note by the government was that many taxpayers complained about receiving income tax notices of tiny tax assessments such as Re 1, Rs 2, Rs 6, etc.

According to the press release issued by the government at the time:
It has been reported in some sections of the press that the Central Processing Center in Bangalore sends tax payment notices as small as Rs 1, 4, 6, causing unnecessary hardship to assessees. It has been argued that where refunds for amounts less than Rs 100 are not issued by the income tax department, the claim of less than Rs 100 should also not be collected.

The Department of Income Tax has created a central repository of all claims for better claim management as required by the Standing Committee of Parliament and C&AG. To achieve this, all the officers were instructed to gather the demand located in various locations viz. IRLA registers, TMS and manuals and upload to CPC portal. This was also part of the annual action plan. Therefore, the AOs uploaded the same. In a meeting with the Bangalore Association of Chartered Accountants, it was suggested that taxpayers should also be notified in the same manner to enable them to take necessary action if pending claims were incorrect. This measure was intended to ensure greater transparency.
Consequently, a communication was sent to taxpayers informing them of the existing arrears. It may be specified that this communication is not a formal notice. This measurement is, in fact, a user-friendly exercise for the people evaluated. The Department has also written to all Chief Commissioners to amend these entries, if found to be incorrect, when approached by ratepayers. This would correct the database if a taxpayer has proof of payment etc. In accordance with the existing procedure, a request below Rs 100 is not applied but is subject to adjustment against future refunds.


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