Indemnity Bond for IT Refund

Why do we pay Income Tax ? This can be debated for ever and we are not going to discuss that today. Assuming that the hard earned money of the tax payers are put to good use by the government which is yet again debatable, my first concern is that when I pay my taxes on time, I MUST get my IT refund as promptly too. When the common man is subjected to TDS (Tax deducted at source), the least one can expect is that the IT department does not sit on the refund for long. There has to be a realistic timeline not running in years and decades by when the government MUST refund any amount receivable by the taxpayer. Unfortunately though there is a theoretical timeline for refunds, there are always umpteen reasons for the ITO to delay an IT Refund. The refund process has seen a marked improvement over the years but there are still areas of improvement.

I have seen that IT returns filed online get processed faster and hence the refunds. There is also a tool available to check your IT refund status online  Online Income Tax Refund Status

Sometimes you will see a message stating that 

1. Your assessing officer has not sent this refund to Refund Banker.
2. If this refund has been sent by your Assessing Officer within the last week, you may wait for a week and again check status.

It will take some time until we have a system where the refund related information is updated faster.

If you returns are older then 2-3 years then upon inquiry you may be asked by the Income Tax Department to submit an Indemnity Bond addressed to the President of India which basically states that you confirm that you have not received that particular IT refund order and that you will be responsible in case excess or duplicate refund is issued to you. This is a standard process and it is fine to provide the Income Tax department with an Indemnity Bond if inquired. Take a printout of the following template on a Rs 200 Non Judicial Stamp Paper and get it notarized. In Bangalore, you can get one done in Koramangla BDA Complex.

Indemnity Bond for Income Tax Refund Template

In some cases where the IT refund has returned back either due to change in address or non availability of the person then you can write a letter to Central Processing Cell, Bangalore with your details and request them to remit the refund amount to your Savings Bank account. You will need to enclose a cancelled cheque of your savings account #. Please refer to the following template

Letter to CPC regarding return of Refund Cheque

I hope the information on this post helps you get your Income Tax Refund on time.