How to Update Bank Details After Filing Income Tax?

You filed your ITR, and you are waiting to get the refund. However, after submitting, you realize that the bank account details you provided are wrong, outdated, or linked to an account that has been closed for a long time. This situation may seem stressful, but don't worry, you can fix it easily.

The Income Tax Department permits you to update your bank details after filing. The process can be completed entirely online through the e-filing portal. The key is to act quickly before your return is processed and the refund is dispatched.

Keep reading further to know how to update bank details after ITR filing, what to look out for as an NRI, and what happens if the refund is credited to the wrong account.

Why NRIs May Need to Update Bank Details After Income Tax Filing?

Before we move further with understanding how to correct bank account details on the Income Tax Portal after ITR filing, let's see why NRIs may have to update them. Here are some common reasons why NRIs might need to update their bank account details after filing:

• Change in Account Type: Many NRIs open NRO accounts upon moving abroad. If the account type changes, like from NRO to NRE, and the old account is inactive, you will face failures in receiving the refund.
• Bank Mergers and IFSC Changes: Recent mergers of Indian banks have led to changes in account numbers and IFSC codes. However, NRIs who have not actively checked their Indian accounts may not realize that these updates need to be reflected on the e-filing portal.
• Closed or Dormant Accounts: Accounts that remain inactive for long periods may be classified as dormant or closed by the bank. A closed account on the e-filing portal means refunds will be rejected and returned to the Income Tax Department.
• Mobile Number Mismatch: To facilitate pre-validation, the mobile number registered with your Indian bank must match the mobile number on your e-filing account. NRIs who have switched their Indian SIM or updated one of these records will face validation issues.
• New Accounts: Some NRIs open new Indian accounts to receive tax refunds. However, they may overlook the requirement to pre-validate these accounts on the portal before filing. The refund will not be processed without pre-validation.

Now comes the next question: can you update the details after the ITR is filed? Let's discuss that.

Can You Update Bank Details After Filing Your Income Tax Return?

Yes, you can update your bank account information on the income tax e-filing portal at any point. If you complete the update and pre-validation before a refund is issued, the updated account will become eligible to receive the refund.

Moreover, you must submit a refund reissue request after updating and pre-validating your bank account if the refund has already been processed or failed.

In short, you can update your bank details through the e-filing portal if your return is still being processed. This will help the refund go to the updated account. Similarly, you must request a refund reissue after correcting bank account details after ITR filing if the refund has already been processed.

It's advised to act quickly after filing to identify any errors before the refund is dispatched. Next comes the main part, which is the steps to update the bank account details.

How to Update Bank Account Details on the Income Tax e-filing Portal?

The entire process to correct bank account details after filing the ITR can be completed online. Here is how to correct bank account details after filing ITR:

Step 1: Log in to the Income Tax e-filing Portal

Visit the official income tax website and log in using your PAN, password, and the OTP sent to your registered mobile number or email.

Step 2: Go to My Bank Accounts

From the dashboard, go to "My Profile → My Bank Accounts. This section will show all the bank accounts that are currently linked to your PAN.

Step 3: Revalidate an Existing Account

If an existing account appears with incorrect details, like the wrong IFSC, outdated account number, etc., select it and click on 'Revalidate'. Enter the corrected information and submit for verification.

Step 4: Add a New Bank Account

If you wish to add a completely new bank account, then

• Click on 'Add Bank Account'
• Enter your account number, IFSC code, and type of account (savings, current, NRO, and NRE).
• Ensure the name on the bank account matches exactly with your PAN records
• Submit for pre-validation

The system will verify your account against bank records, and then you will recieve a confirmation upon successful pre-validation.

Step 5: Choose the Correct Account for Refund

After pre-validation, choose the correct account as your refund account. You can nominate only one account at a time for a refund. Confirm that the nominated account is active and capable of receiving electronic transfers.

Step 6: Use the Service Request for Correcting Returns (if needed)

You also have the option to submit a service request if your return has been filed but is still pending processing. Here is how you can do it:

• Go to e-file → Income Tax Return → View Filed Returns
• Choose the relevant assessment year
• Under service request, use the 'Change ITR Form Particulars' option if applicable
• Fill in your ITR acknowledgement number, specify the bank detail change, and submit.

Step 7: Track the Status

Under 'Service Request', monitor the progress by clicking on 'View Request'. After submission, the pre-validation is usually completed within a few working days. However, the exact processing time depends on your bank and the system's verification processes.

In pre-validation, the following requirements are checked:

• Bank account must be linked to your PAN
• Mobile number registered with your bank must match the one on your e-filing profile
• The name on the bank account must match the name on your PAN
• Account must be active and able to receive NEFT/ECS transfers

Moving further, let's understand what happens if your tax refund is sent to the wrong bank account.

What If Your Tax Refund Is Sent to the Wrong Bank Account?

If your return has been processed already and the refund was sent to an incorrect account, you don't need to panic. We will discuss what happens if such a situation occurs and the actions you need to take:

Situation 1: What Happens When a Refund is Credited to the Wrong Account?

The banks usually return the amount to the Income Tax Department if the provided account number is wrong or the account is closed. Therefore, the portal will update your refund status to 'Refund Failed' or 'Return Returned'.

Steps to Recover the Refund

• Step 1: Update Your Bank Details on the Portal: Go to 'My Profile' → 'My Bank Accounts' to add or update your correct account. Complete pre-validation before moving forward.
• Step 2: Request a Refund Reissue: Go to Services → 'Refund Reissue '. Choose the assessment year for which the refund has failed. Then, select the pre-validated bank account and submit the request. Keep in mind that OTP verification will be required.
• Step 3: Monitor the Refund Reissue Status: Track the status in the same 'Refund Reissue' section. Once your request is approved, the Income Tax Department will process the refund. The actual processing time may vary based on the verification.

Situation 2: What if the refund was credited to an account you no longer own?

This is a more complex situation. If the bank account belonged to someone else, you may be required to file a grievance. For example, this can happen when you type the wrong account number mistakenly. You can file a grievance through the 'e-Nivaran' or 'grievance' section on the portal.

Also, you can contact the bank where the incorrect credit was received (in some cases). The resolution may take time, and this is one reason why verifying the account details is important before filing. Don't be confused, let's take the help of an example to understand this clearly.

Common Mistakes that NRIs Should Avoid

Here are some of the most common mistakes that NRIs must avoid;

• Not pre-validating the bank account before filing: This is the most frequent error. The pre-validation process can take 2-7 days, so ensure you complete it before filing your ITR.
• Using a dormant or inactive NRO account: NRO accounts that remain inactive for 12 to 24 months may become dormant. Banks may block incoming transfers to dormant accounts, so ensure your account is active before filing.
• Mobile Number Mismatches Between Bank and Portal: NRIs who change their Indian SIM number while abroad often have different numbers registered with the bank and e-filing profile. These must align for successful pre-validation, so ensure you update both records before attempting pre-validation.
• Entering the Wrong IFSC After Bank Mergers: Several major bank mergers (including Lakshmi Vilas Bank and PMC Bank) have resulted in updated IFSC codes. So, instead of relying on outdated documents, always ensure you verify the current IFSC on your bank's official website.
• Waiting Too Long After Receiving a Failure Notification: The Income Tax Department does not hold the returned refunds for a long time. Although there are no immediate penalties, it is advised to submit a reissue request as soon as possible, or else the money will sit with the department longer. Also, there might be limitations on the request window in some cases. So, ensure to act within a few days of receiving any notification of failure.

The Bottom Line

If you act before the return is processed and the return is dispatched, the process of updating bank details after filing the ITR becomes easy. Once your account is pre-validated, the entire process can be completed online in just a few minutes. Additionally, you don't even need to visit a tax office or bank branch in person.

NRIs must ensure that their bank account is active and pre-validated before filing. Also, check whether your number matches across both the portal and your bank. Moreover, if you are still confused about the process or need help with ITR filing, connect with Savetaxs.

At Savetaxs, we have a team of experts who are skilled and knowledgeable about the ITR filing process. Our team can help you with the entire process to ensure accuracy and compliance. We can also help you clear any doubts to make sure you have complete peace of mind. Connect with us right away, as we are working 24/7 across all time zones.