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Although, tax refund must be claimed within one year from end of the assessment year, there is a remedy for belated & additional claims!  
                  There may be situations where considering the amount of tax deducted at source from the income of the taxpayer or the advance-tax paid by the taxpayer on his estimated income, the taxpayer becomes entitled to claim refund of income-tax, if such tax deducted or paid exceeds the actual income tax liability for the relevant assessment year. A taxpayer may also become entitled to refund of income-tax as a result of any order passed in appeal, rectification or revision, when the assessed taxable income has been reduced and he had paid excess tax earlier.

                  Section 237 of the Income-tax Act provides for granting of Refund of excess tax paid or deducted in the case of a taxpayer, where such tax exceeds the actual tax payable by him.


                  Section 239 prescribes that every claim for refund shall be made within the end of one year from the last day of the assessment year, for which such refund is claimed. To illustrate, for tax paid or deducted during the Financial Year 2009-10, the relevant Assessment Year is 2010-11.                 Accordingly the claim for income-tax refund in this regard must be filed along with the Income-tax Return latest by 31st March 2012.


                  The Central Board of Direct Taxes (CBDT) has issued a number of Circulars from time to time, by invoking its powers under Section 119(2)(b), granting remedy and relief in cases of belated claims of refunds.

                  CBDT Circular No.8/2001, dated 16-5-2001 in regard to condonation of delay in filing refund claim has clarified that in all cases where an otherwise valid refund claim under Section 237 is filed by a taxpayer, after the expiry of the statutory time limit prescribed under Section 239, the Assessing Officer may admit the said refund claim and dispose of the same on merits and in accordance with law, provided the following conditions are satisfied:

  • the refund arises as a result of excess TDS or Advance Tax and the amount of refund does not exceed Rs.1,00,000 for any assessment year;

  • the refund claimed is not supplementary in nature, that is the claim for additional amount of refund is not made after the completion of the original assessment for that year; and

  • the income of the taxpayer is not assessable in the hands of any other person under any provisions of the Income-tax Act.

                 Under the above Circular, the CBDT has also clarified that a belated claim for refund can also be entertained in a case where the returned income is a loss. The power for condoning delay in case of refund claims upto Rs.10,000 is vested with the Commissioner of Income-tax and upto Rs.1,00,000 with the Chief Commissioner of Income-tax. The power of condonation in cases of refund claims of more than Rs.1,00,000, as well as power of rejection in all cases will be with the CBDT. The above Circular can be usefully relied upon to obtain belated claims of Income-tax Refunds.


                  It may often happen that a taxpayer is not able to claim credit for TDS at the time of filing his Income-tax Return, since the relevant TDS Certificates may not have been received in time or he misses to claim credit for the same through oversight. In such cases, credit for the relevant TDS would not be granted by the Assessing Officer while passing the intimation under Section 143(1) in the case of the taxpayer. No remedy was earlier available in such situations.

                  Fortunately, the Finance Act 2002 introduced a new provision through Section 155(14), which allows the taxpayer an opportunity to file a supplementary claim for refund in such situations. However, the following two conditions would be required to be fulfilled in this regard:

  • The application for rectification supporting the claim for such TDS credit must be made within two years from the end of the relevant Assessment Year to which the TDS pertains, along with the attachment of the relevant TDS Certificates.

  • The income from which such TDS has been made should have been disclosed in the Return of Income for the relevant Assessment Year.

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