Tax Incidence In India

Dear Friends,

3rd March,21

I know it is very frustrating when being an NRI your huge fund gets stuck with the Indian income tax department due to high rate of withholding taxes in India. And when it’s almost the end of next financial year and still your ITR is not processed or if even processed, refund is not issued. Let me try to tell you the reason behind this:

This year income tax department has upgraded their whole processing system due to which there is a delay in processing of ITRs and further issuing of the refunds.

In year 2009, the Government of India established a Centralized Processing Centre known as CPC for the bulk and fast processing of ITRs. It did excellent job in the past years. Now almost all ITRs are filed through online income tax portal. CPC did remarkable job by processing the ITRs, sending intimations, and issuing the refund in a timely manner. Only few ITRs which are selected for scrutiny or need special attention were transferred to Assessing officers for further clarifications from assessees.

Now, to improve the system further, the government is bringing more efficient and upgraded system i.e. CPC 2.0. Few highlights of new system are:

  1. Prefilled ITRs
  2. Rule driven and bulk processing of ITRs
  3. More transparency and accountability of income tax department and professionals
  4. Keeping taxpayers informed through apps, SMS, emails, websites
  5. Integrated and digitized tax centers for tax payers

But as we know bringing change is always difficult. It took more time than expected to upgrade the system from CPC to CPC 2.0 which delayed the processing of ITRs of F.Y 2019-20.

Though from January 2021, processing of ITRs has started in full swing but still many ITRs are not processed till yet or even if they are processed, refund of few of them is still pending due to various reasons.

Now, Following are the points which you can perform to speed up the process at least at your end :

  1. Your latest email id and phone number should be updated in your online income tax account.
  2. Contact details which you have mentioned in online income tax account should be updated with your bank also. *Bank mentioned here means that Indian bank in which you want refund to be credited.
  3. Your bank account in which you want refund should be pre validated in the income tax portal.

To do this follow these steps:
>>Log in to your income tax account using following link:
>> Go to Profile settings
>> Pre validate your bank account
>> Fill details in the blanks and submit.
You should get an email that pre validation is successful.

4) In case of joint holders of bank account, refund is credited only for those assessee who are primary holders of bank account i.e whose pan is linked with that bank account. It means if you have only one bank account in India in which you are secondary holder and you are expecting a refund from Indian income tax department then better to open a new bank account in India as a primary holder and also pre validate it on income tax portal.

In case your refund is failed due to some reason then first pre validate the bank account and then register refund reissue request by following below steps:

>> In your income tax account Go to My account
>>Service request
>>New request
>>Refund reissue
>>Click on Response Submit
>>Choose an account in which you want a refund
>> Option 2 I do not have EVC
>>Then e verify either through net banking or any other option available

5) In case you have questions about processing of your ITR then you can contact income tax authorities at +91 8046122000. Dial 08046122000 if you are in India. Please make sure you shall have information like pan no, date of birth, full name, assessment year with you.

6) In case you have questions about processing of your refund then you can contact income tax authorities at 18004252229 or 08046605200 or 18001034455. Please make sure you shall have information like pan no, date of birth, full name, assessment year with you.

Disclaimer: This article is solely based on my views, experience and interaction I had with Indian Income Tax Department. People may have different view on above.

Please do let me know if you still have any questions related to above. You can write to me at or call/whatsapp me at +91 9910075924.

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