Today people are more vigilant towards filing there income tax return on time as they understand its importance and benefits. Other than that the other important reason for filing income tax return on time is to get the tax refund early. Tax refund is a refund on taxes from the authority when the tax liability is less than the taxes paid. Any taxpayer can claim a tax refund on their income tax at the end of financial year or we can say at the time of filing tax return if the tax they owe is less than the sum of the total amount of the taxes they have paid during the financial year.
Although it is important to take care of all the details you fill in while filling your income tax return but in refund cases 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 ‘Direct credit in bank account’ has been selected. So double sure your self while filing MICR code in Income tax return.
What Is MICR Code?
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 which is made up of magnetic material. On insertion of the instrument in the machine, the printed information is read by the machine.
This system ensures minimization of errors, easy clearing of cheques and faster processing of fund transfer.
MICR code consist of 9 (XXXXXXXXX) digits
First three digit (XXXXXXXXX) denotes city : The very first digits of MICR denotes city and are identical to the first three digits of your pin code. For Example : First three digit of Pin code of New Delhi =110 so first three digit of MICR code of all the bank branches located in New Delhi must be 110.
MICR Code : 110XXXXXX
Next three digits (XXXXXXXXX) denotes bank code : The next three digits of MICR code i.e. 4-6 digits denotes bank code. Each bank has its three digit unique bank code. For Example : SBI code is “002” so 4-6 digit of MICR Code of all the branches of SBI is “002” irrespective of location in the India.
MICR Code : 110002XXX
Next three digits(XXXXXXXXX) denotes bank branch code: The next three digits of MICR code i.e. 7-9 digits denotes bank branch code. Each bank has its 3 digit unique branch code. For Example : SBI has one branch in Delhi with the branch code is “001”. So 7-9 digit of MICR Code of SBI Delhi branch is “001”.
MICR Code : 110002001
So you can recognize the city, bank and bank branch with the MICR Code.
How To Get Your Bank Branch MICR Code?
You can get your MICR Code either from your
- Your bank branch : Contact your bank branch to get your MICR code
- Your cheque book : Locate 9 digit number on your cheque book where first three digits are identical to the first three digits of your pin code. Eg. 110 for Delhi
- Online : Search online
Benefit Of MICR Code Other than Income Tax Return (ITR)
Other than getting Income tax refund directly to your account, other organizations are also using MICR code to send funds directly into the customers account.
- Refund of application money in shares
- Refund of taxes by other departments
- Refund of application money for real state/plot by govt/private organization. etc.
Note: All the Bank branches in India do not have MICR Code. In such case you cannot get your refund in your bank account rather you can get the amount through cheque.