Refund not getting credited in case of Foreign company in foreign bank account

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manthan shete

46 Points Posted on 09 October 2022

I have been filing ITRs of foreign companies since quite a few years but these companies have not yet received the refund due in their foreign bank accounts till date. Income tax department has however deducted the tax on interest (under sec 195) on such refund but not credited the refund or interest thereon in the Foreign bank account declared in ITR.

Is there any different process to claim refund of foreign companies?

Replies (3)

Quick Summary

Foreign companies are experiencing difficulties receiving tax refunds credited to their foreign bank accounts, despite the Income Tax Department deducting taxes on these refunds. While the ITR form allows for foreign bank account details, the online filing system currently states that refunds are only issued to Indian bank accounts. This contradicts previous clarifications and leaves foreign entities without a clear process to claim their due refunds.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121534 Points Posted on 10 October 2022

Whether you have any bank account in India?

If no.. The details that have to be given in ITR include details such as: international bank account number (IBAN) or SWIFT code of the bank, name of the bank, country of location and account number.

You can check the status of the tax refund on the Tax Information Network website https://tin.tin.nsdl.com/oltas/refundstatuslogin.htm l, which is maintained by National Securities Depository Limited.

If required you can file request for 'Refund Reissue'

CA Vineet

28 Points Posted on 27 January 2023

Yes refund to foreign company is possible. Please feel free to reach out to me at kumarvineetca @ gmail.com. We have got it done for multiple foreign companies.

mohan thekkinghat

24 Points Posted on 25 May 2024

The ITR 2 form has the columns to give the foreign bank account details. This is for sure. NRIs who has no bank account in India can provide the details of one foreign bank account for getting refund if they have no bank account in India. This is as per the clarification issued by Income Tax dept on 24th July 2017.

However, this facility to furnish the foreign bank account details is not provided for in online filing site! It is mentioned that NRIs can choose "NO" response to the question if bank account exists in India. But, when this "NO" answer is chosen, a message prompt is displayed saying " Currently refund is issued only to bank accounts in India and not to a foreign bank account". And, there is no way, the NRIs can furnish their foreign bank account details while furnishing the tax return. This is the situation for Assessment Year 2024/25 right now.

The query to the Income Tax Dept is not answered directly to this anomaly. When the tax return is previewed before filing, it sure says that NRI can opt to give the details of one foreign bank account!

I don't know where is the lapse? Either, the Govt has gone back on their earlier stand of giving direct refund to NRIs to their foreign bank account (if they have no bank account in India) or it is indirect persuasion of the Govt to NRIs that they should open a bank account in India.

In a nutshell, it is a big let down for NRIs who closed their bank account in India believing the assurance of Govt that direct refund would be given to their foreign bank account in case they do not have a bank account in India.