Tax Refund
A tax refund or tax rebate is a refund on taxes when the tax liability is less than the taxes paid. The return of excess amounts of income tax that a taxpayer has paid to the state or federal government throughout the past yearTaxpayers can often get a tax refund on their income tax if the tax they owe is less than the sum of the total amount of the withholding taxes and estimated taxes that they paid, plus the refundable tax credits that they claim.. In certain cases, taxpayers may even receive a refund if they owed no taxes, because certain tax credits are fully refundable.
In India, there is provision of refund of excess tax along with interest. For claiming a refund one has to file the income tax return within a specified period. However, under Sections 237 and 119(2)(b) of the Income Tax Act, the Chief Commissioner or Commissioner of Income Tax are empowered to condone a delay in the claim of a refund.
Many taxpayers look on tax refunds as a “bonus” or a stroke of luck at tax time. In reality, a tax refund represents an interest-free loan that a taxpayer makes to the government. Ideally, a taxpayer will have just enough taxes deducted from his or her paycheck to avoid receiving a refund.