What is the deadline to receive a tax refund? I have not received a refund till now for FY 2021-22 or AY 2022-23. What steps should I take next?
As per the provisions of Income-tax Act, where a return of income is filed, it is verified and processed electronically by the income-tax authorities. Upon processing, an intimation under 143(1) of the Act is generally issued to the taxpayer within nine months from the end of the financial year (FY) in which the return is furnished, accepting the returned income / determining any additional tax refund or demand, as the case may be.
Accordingly, for FY2021-22, assuming the return is filed during FY2022-23, such intimation should generally be received by 31 December 2023.
You may check the status of the processing of the tax return from your income-tax e-filing account. In case your return is already processed, you may check the intimation under section 143(1) issued to you, to determine if the claim of refund has been accepted or any discrepancy exists vis-à-vis the return filed by you.
Once the return is processed and refund determined, the eligible refund (if any), may be expected to be received in due course, unless the refund is proposed to be adjusted with any other outstanding demands/ any other technical issues including non-linking of bank account, refund credit failure, etc. in which case suitable corrective action including filing an online grievance may be considered.
Also, in specific cases, the tax department can hold on to the tax refund for meeting specific conditions.
I am a salaried individual in the 30% tax bracket and have to pay ₹2.5 lakh in taxes. If I transfer ₹2.5 lakh to my the bank account of my wife, who is a homemaker, can I claim tax exemption on this amount?
As per the provisions of section 56 of the Income-tax Act, 1961 (‘the Act’), where an individual receives gift of any sum of money/ies, aggregate value of which during a year exceeds ₹50,000, the same is taxable in the hands of the recipient individual under the head of ‘Income from Other Sources’. However, if the gift is received by the individual from a specified relative (which includes the spouse), the same is fully exempt from taxation in the hands of recipient individual.
To be sure, there is no exemption for the amount gifted in the hands of the transferor. Hence, the money transferred by you to your wife’s bank account as a gift will not qualify for any tax exemption in your hands.
As per provisions of section 64 of the I-T Act, any income which arises to the spouse of an individual from assets transferred without adequate consideration (whether directly or indirectly) by such individual, being the transferor, is clubbed and taxed in the hands of the transferor. Accordingly, incomes earned by your wife from the money gifted by you shall be clubbed in your income and taxable in your hands.
Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India.
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