Tax Refunds

 

A tax refund is a reimbursement to a taxpayer of any excess amount paid to the federal government or a state government. Taxpayers tend to look at a refund as a bonus or a stroke of luck, but it most often represents an interest-free loan that the taxpayer made to the government. In most cases, it is avoidable. Tax Refunds The first two examples are easily avoided. That is, the money would have been paid to the taxpayer over the course of the year if the correct information had been on the W-4 form. Of course, sometimes a tax refund is both unavoidable and welcome. For instance, a taxpayer who was laid off early in the year and was unable to get a new job immediately might receive a substantial refund based on his or her actual annual income.Income tax refund: Sounds quite familiar, doesn’t it? Many of us would have received a refund from the income tax department in the past. So, when and how does one get a refund? Let us explore this in detail. Tax Refund arises when taxes paid are higher than your actual tax liability (including interest). It could be in the form of advance tax, self-assessment tax, tax deducted at source, foreign tax credit etc. Given below is an illustration showing when and how a refund arises.Income Tax refund arises in case of a mismatch between the tax amount paid and the actual payable amount. If the amount paid is higher than the actual amount payable, a refund is initiated. The Form 30 is used for the same purpose. Under the income tax and other Direct Tax laws, tax refunds arise in those cases where the amount of tax paid by a person (or paid on his/her behalf) is greater than the amount on which he/she is properly chargeable. Compare & Invest in Top SIPs, Get Unbiased Advice & Investment Quotes for Free. Invest Rs.5000 Per Month & Get 50 Lac Return. Zero Allocation Charges. Tax Benefit Under Sec 80C. High Return Investments. 30+ Investment Offers. Types: Child Education Plan, Child Life Insurance, Growth Plan, Money Back Plan, SIP Plan, Retirement Plan, Pension Plan, High Return Plans, Zero Comission Plan.