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What Is Tax Rebate & Tax Refund? How to get Tax Refund & Tax Rebate?

What Is Tax Rebate & Tax Refund? How to get Tax Refund & Tax Rebate?

Tax Rebate Vs Tax Refund How To Get Tax Refund And Tax Rebate
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What Is Tax Rebate & Tax Refund? How to get Tax Refund & Tax Rebate?

Whether you prefer to fill out your own tax returns or employ the services of a chartered accountant or tax expert, it is important to stay informed about some essential concepts in tax filing. In particular, as a taxpayer, you should be aware of how you could be paying more in taxes than you are required to. You should also be aware of how you can receive reimbursements for the same from the government.

To that end, the two essential topics in tax filing you should know about are tax rebate and tax refund. Taxpayers are often confused between the two terms. But while they both pertain to lowering your tax liability, there is considerable difference between the two. Let us take a look at both concepts as well as how to get tax refund and tax rebate:

What is a Tax Rebate?

During filing for tax returns, you can avail various exemptions and deductions on your total taxable income to reduce your tax burden. This amount can then further be reduced by the means of tax rebates.

Tax rebate essentially refers to a claim of reimbursement that a taxpayer can make on his taxable income during tax filing. Filing for one or several applicable tax rebates can help a taxpayer greatly reduce his overall tax liability.

What is Tax Refund?

When the taxes you have paid amount to more than your overall tax liability, the difference is paid back to you by the government in the form of reimbursement. This reimbursement is known as tax refund. While many view tax refunds as a bonus, it is merely the additional taxes paid by you either directly during self-assessment, or indirectly as with taxes deducted at source.

It is important to figure out how to get a tax refund, how much is owed and file for the same during tax filings. You are eligible to receive not only the amount of tax refunds owed to you, but also the interest accumulated on it.

Tax Rebate Vs. Tax Refund

As you can see from the aforementioned definitions, the concepts of tax rebate and tax refund are quite similar. In some cases, the two terms are even used interchangeably. However, ultimately, the difference between tax rebate and tax refund comes down to what the two terms refer to. Tax rebate refers to the relief you can claim to reduce income tax burden. It refers to the amount of tax liability that you, as a taxpayer, do not have to pay.

Tax refund, on the other hand, refers to the amount you receive from the government because your paid taxes exceed your computed tax liability. It is essentially a tax reimbursement. Tax refunds are usually applicable when your advance tax, TDS or self-assessment tax paid by you ends up being higher than your overall tax liability.

How to Get a Tax Rebate

Tax rebates are specifically provided for through the income tax laws laid out by the government of a country. As long as you fulfill the conditions specified for the tax rebate, you are eligible to avail it when you file your overall tax returns.

For example, as per Section 87A of the Income Tax Act, you can avail a tax rebate of Rs 12,500. However, it is only applicable if your total taxable income (after deductions and exemptions) is upto Rs 5 lakhs in a financial year.

How to Get a Tax Refund

One of the most convenient ways of getting a tax refund is by filling out your income tax returns online. You can make use of the ITRs provided online by the income tax department that come pre-filled with all your essential information. On submitting this form and clicking on ‘validate’, the system can automatically calculate the tax refund owed to you.

This amount is calculated based on the data provided by you in the ITR form. Keep in mind that while this amount might be the refund claimed by you, it will still go through a confirmation process by the income tax department. Hence, the final tax refund received by you might be different.

One of the most effective ways of saving taxes every financial year is by making prudent choice in tax-saving investments. For that purpose, one of the most popular investments made by taxpayers every year is a reliable term insurance plan.

To that end, the iSelect+ Term Plan, available on Canara HSBC Oriental Bank of Commerce Life Insurance, a term insurance plan that can protect your finances and ensure coverage to your family in your absence. It is accompanied with a range of useful add-on riders, such as Accident Death and Disability, ensuring coverage even in unexpected,unfortunate circumstances.

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