People are observed to be more cautious towards filing of income tax return on time as they are aware of its importance as well as benefits. In other words it can be said that reason behind filing income tax return early is to get the tax refunds early. It must be clear that tax refund is the excess of tax payment over tax liability. Any taxpayer can claim a tax refund on their income tax at the end of financial year.
It is important to take care of all the details you fill in while filling your income tax return but in case of tax refund it becomes more important to provide correct PAN Number, Bank Account Number and MICR Code to get the refund amount directly into your bank account on time. MICR code is mandatory to be filed in refund cases, if option of â€˜Direct credit in bank accountâ€™ has been selected. So make assure to yourself while filing MICR code in Income tax return.
For this purpose you must know what MICR Code exactly is? So for your orientation a clear depiction of MICR code is put into effort over here.
Firstly, MICR Code stands for Magnetic Ink Character Recognition Code. In MICR technology the information is printed on the instrument with a special type of ink, made up of magnetic material. On insertion of the instrument in the machine, the printed information is read by the machine. MICR system minimizes the chances of error. Clearing of cheques becomes easy and also transfer funds quicker in order to facilitate operations.
Secondly, MICR Code consists of 9 Digits. Of which segregation is as follows â€“
- First three digit (1-3) denotes Pin Code of the City
For example: If the Assessee stays in Mumbai and have a Bank Account over there in SBI Bank then the first 3 digit of MICR Code will be first 3 digits of Pin code of Â Mumbai i.e., â€œ400â€. Thus, first 3 digits of MICR code of all the bank branches located in Mumbai must be â€œ400â€.
- Middle 3 digits (4-6) denotes for Bank Code
Each bank has given a three digit code. Since in the above example assessee has an account in SBI Bank of which the code is â€œ002â€ irrespective of location in the India.Â So 4-6 digits of MICR code of all the branches of SBI is â€œ002â€
- Last three digit (7-9) denotes Branch Code of Bank
Suppose Mumbai has only one branch of SBI and its MICR code will be then its Branch code will be â€œ001â€
Therefore the MICR code of an Assesse will be “110002001”.
400 (For City), 002 (For Bank), 001 (For Branch)
So if an assessee locating in Mumbai and given his MICR Code of the bank located in Mumbai, which doesn’t begin with “400”, then it can be easily verify that the given MICR code is wrong.
MICR Code can be acknowledged from any of the following option:
- Your Bank Branch: Contact your bank branch to get your MICR code
- Your Cheque Book: Locate 9 digit numbers on your cheque book where first three digits are identical to the first three digits of your pin code. E.g., 400 for Mumbai
- Online Search can also be made for the same.
Benefits of MICR Code other than Income Tax Return:
- By Mutual fund for sending sale receipt of the units to customer account
- Refund of application money in case of shares.
- Refund of taxes by other department also.
Refund of application money for real state/plot by govt/private organization.