Tax dept will not pay you income tax refund of this amount

After your income tax return (ITR) is processed, you will get an intimation notice under Section 143 (1) of the Income Tax Act, 1961, from the income tax department. The intimation notice informs if you have an income tax refund due or not. In case, there is an income tax refund due to you as per the income tax department's calculations, it typically gets credited to your bank account in few weeks time. However, do keep in mind that if the amount is less than Rs. 100, then the income tax refund amount will not be credited to your bank account.

Such income tax refund amount will be added in the future income tax refunds. So, if you have some income tax refund amount due next financial year then the pending small refund of this year would be added to it, and it would be credited to your bank account if the total amount goes above Rs 100. Else, if you are required to pay taxes in next financial year you will get tax credit for pending small amount and will be required to pay net amount after deducting this past refund credit.

Also Read: How to claim income tax refund


Abhishek Soni, CEO, Tax2win - an ITR filing website says, "As per the government's press note dated January 5, 2012, the demands of less than Rs 100 would not be enforced but liable for adjustment against future income tax refunds. Practically, it has been seen that income tax refund amount of less than Rs 100 is not processed and credited into individual's bank account by income tax department."

The income tax department informs individual taxpayers about any income tax refunds or dues via intimation notice section 143(1). This intimation notice is sent to you once you have filed and the verified ITR is processed by the income tax department.

Also Read: How to prevalidate bank account to receive income tax refund

It is important to note that if there are any minuscule income tax dues pending before filing of income tax return, then same must be paid before ITR is filed and verified.

For instance, your self-assessment dues after calculating your total income tax dues comes to be Rs 75. In such a scenario, you are first required to deposit Rs 75 and then file ITR.

Reason behind issuing press note by the government
The main reason for issuing press note by the government was because many taxpayers complained about receiving income tax notices about minuscule tax dues such of Re 1, Rs 2, Rs 6 etc. As many people complained about it, the income tax department issued a clarification in this regard.

As per the press release issued by the government at that time: It has been reported in some sections of the press that the Central Processing Centre, Bangalore is sending notices for payment of taxes which are as small as Rs 1, 4, 6, causing unnecessary hardship to assessees. It has been argued that when refunds for amounts less than Rs 100 are not issued by the income tax department, then the demand for less than Rs 100 should also not be collected.

The income tax department has created a central repository of all demands for better demand management as required by Standing Committee of Parliament and C&AG. To achieve this, all officers were asked to collate demand lying at various places viz. IRLA, TMS and manual registers and upload onto CPC portal. This was also part of the annual action plan. Consequently, AOs have uploaded the same. During a meeting with Bangalore Chartered Accountants association, it was suggested that taxpayers should also be informed about the same so as to enable them to take necessary action if the outstanding demands were incorrect. This measure was aimed at providing greater transparency.

Therefore, a communication has been sent to taxpayers informing them about existing arrears. It may be clarified that this communication is not a demand notice. This measure is, in fact, an assessee-friendly exercise. The department has also written to all chief commissioners to amend such entries, if found incorrect, when approached by taxpayers. This would correct the database if a taxpayer has proof of payment etc. As per extant procedure, demand of less than Rs 100 is not enforced but is liable for adjustment against future refunds.