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Income Tax Return Status: 5 Terms You Should Know Research Team | Posted On Friday, July 20,2018, 07:01 PM

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Income Tax Return Status: 5 Terms You Should Know




While you definitely exercise due diligence while filing income tax returns (ITR), you should be on your toes and regularly check the status of your income tax return.

It is very crucial to exercise due diligence when filing income tax returns (ITR). Tax rules keep changing and many laymen find them difficult to understand. Making mistakes when filing income tax returns may land you in a soup. You may not only end up losing the income tax refund, you could also be penalized and face prosecution.

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Income Tax Return Status: 5 Terms You Should Know


Income tax returns are deemed to be complete, only if a taxpayer verifies them. Verification of returns is mandatory for the Centralized Processing Centre (CPC) of the Income Tax Department to accept and process the returns. It is a declaration that all the details furnished by you in the ITR and its submission are made with your consent and you have given approval to the Department to process it.

If you are under the impression that Filing error free ITR and verifying it is all that needs to be done, you are wrong. There is another task, as important as any and that is to check the status of your ITR. It is important to check the status of your ITR, to ensure that it has been accepted and processed by the Income Tax Department, so that it goes without any glitches.

On verification, the IT Department will process the ITR. If the details furnished by you are accurate, and if no cases of non-disclosure are found, the Department determines the amount of tax refundable or recoverable from you. Nevertheless, if the CPC finds inconsistencies or discrepancies in the return, you will be notified via e-mail.

The status of the ITR is displayed on your account at the e-filing website. Therefore, it is convenient and wise to regularly check the status of your income tax return to be sure that the CPC has accepted and processed your ITR. If you get notified on any discrepancies on your account or CPC proposes you to make changes, you provide a suitable reply in a reasonable time.


Following are 5 terms to know the Income Tax Return Status:


1. Refund Not Determined:


An income tax refund can only be claimed by filing the income tax return. An income tax refund is paid only when the Income Tax Department processes your return and calculates the refund.

A ‘Refund not determined’ status of ITR would mean that your ITR is not yet processed by the CPC. The CPC has to process an ITR within a year from the end of the financial year, in which the return is filed. Example: An ITR filed on 31-06-2017 should be processed by 31-03-2019.

If your ITR has been pending for a longer period with ‘Refund not determined’ status, you can submit a grievance at the e-filing portal.


How to submit a grievance at the e-filing portal?


  • Login to your e-filing account.
  • Go to e-Nivaran tab > Submit Grievance.


2. Outstanding Tax Demand:


An ‘Outstanding tax demand’ status of an ITR means you have tax liability. To know the reason why the IT Department has raised a tax demand, you will have to go through the intimation issued by the IT Department under Section 143(1), sent to your registered e-mail ID.

The intimation received under Section 143(1), is a computer-generated PDF document. All corrections for any arithmetical mistakes, errors in tax calculation and tax credit in the income tax return are made in this intimation. The various reasons for tax demand may be because you had not paid self-assessment tax at the time of filing returns, you claimed additional deductions in ITR, or there is a mismatch in tax credits and others.

See Also: Income Tax Notices You Might Get


What should you do if the status of your ITR is ‘Outstanding Tax Demand’?


  • Login to the e-filing portal.
  • Go to e-file > Response to outstanding tax demand.
  • Select the option applicable to you from among the four options a) Demand is correct b) Demand is partially correct c) Disagree with demand d) Demand is not correct but agree for adjustment.
  • Submit the response.


*If you agree with the tax demand, pay it online or offline at an authorized branch of a Nationalized Bank.

*If you disagree with the tax demand, choose to disagree with the demand and furnish the reasons for doing so.

  • Save the transaction ID for future reference.


3. Defective Return:


If you haven’t filed your return in accordance with the provisions of the tax laws, it is deemed to be defective. A defective return will receive the status of ‘Defective Return’. Accordingly, you will receive a notice of defective return under section 139(9). As stated in this notice, you are required to rectify the defect within 15 days from the date of receiving the notice. If you don’t respond to a defective return notice, your ITR shall be treated as invalid. Following are few reasons for getting defective returns:


  • If you are a professional eligible for presumptive taxation scheme under Section 44ADA, but you have computed and reported your income as per provisions of Section 44AD in ITR-4 instead.
  • If you have claimed relief under Section 89 ITR, but have not filed Form 10E on e-filing portal.
  • If you are required to maintain books of accounts, but have not mentioned details of Final Statements: P&L and Balance Sheet while filing ITR.
  • If you have missed filing all the schedules applicable as per the business code selected in ‘Nature of Business’.
  • If you are liable for a tax audit under Section 44AB but have not filed the audit report electronically.

See Also: Simple Things To Save Tax


What should you do if the ITR status is ‘Outstanding Tax Demand’?


  • Login to your e-filing portal
  • Go to e-file > Response to notice u/s 139(9).
  • Select whether you agree or not with this defect.
  • If you agree, file the corrected ITR in response to notice u/s 139(9).
  • If you disagree, submit the reasons for the disagreement.


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4. Case Transferred to AO:


AO is the Assessing Officer who is appointed by the Income Tax Department, to assess the income of taxpayers falling within their jurisdiction. You will be assigned to a jurisdictional AO, based on the source of income and geographical details.

‘Case transferred to AO’ means your Income Tax Returns are transferred to AO for processing. Only returns involving complexities that couldn’t be processed without any human intervention and thus require AO’s intervention are transferred to the AO.

Following are the circumstances where cases are transferred to the AO:

  • Exceptional entries found in ITR.
  • There are violations in the filing of return on income.
  • You have not filed the return of income for a particular assessment year and file it only after receiving a notice from Income Tax Department.
  • You claim treaty benefits in the ITR like relief under Section 90/91.


What should you do if the status of your ITR is ‘Case Transferred to AO’?


  • Wait for a communication from the AO.
  • You may be reached through telephone, email, letter or SMS and asked to provide evidence supporting your claim or assertions to process the return.
  • Find your jurisdiction A.O. details in your e-filing account.
  • Go to Profile Settings > My profile > PAN Details.


5. Refund unpaid/failed:


This status corresponds to refunds. This status means that the IT Department has sent you the income tax refund, but it wasn’t credited to your bank account because of the incorrect bank account number. In case you have filed your returns manually and not electronically, this status can also mean that the address provided by you is wrong.


What should you do if the status of your ITR is ‘Case Transferred to AO’?


  • Visit the e-filing portal and raise a refund re-issue request.


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