Individual taxpayers can now track the status of their income tax refunds online.

To begin with, the facility has been made available in six cities, Delhi, Mumbai, Bangalore, Chennai, Kolkata and Patna, and will be extended nationwide in a phased manner.

In other cities, the refunds will continue to be issued by the Income Tax Department on a first-come-first-served basis.

To check the status of their refund, taxpayers can log in at https://tin.tin.nsdl.com/oltas/refundstatuslogin.html. If there is a problem, they can contact the assessing officer or the refund banker, the State Bank of India.

In case of any grievance, taxpayers can also contact the additional commissioner in charge of the range or the income tax ombudsman.

This facility is not for companies and trusts.

For faster processing of refunds, details of bank account like the bank, branch and MICR code (a nine-digit number on the bottom of the bank cheque) should be clearly mentioned in the tax return form.

Under the refund banker scheme, the refund amount will be either transferred electronically to the bank account of the taxpayer or be sent sent by way of a cheque delivered by courier.

The Income Tax Department plans to substantially reduce the return processing time, which is at present at least four months.

The department plans to set up six large central return processing centres in different parts of the country. All the returns captured in digital format will be processed at these centres.

The central return processing scheme was announced in the Budget 2008-09.

This would allow taxpayers to get their refunds straight into their bank accounts within a day of processing. The board was looking at both Neft and Real-Time Gross Settlement (RTGS), and has opted for the former. The scheme will be launched on a pilot basis this month, sources said. Initially, however, the facility would be available only in cities that earlier offered the refund banker scheme.

This is a step forward from the refund banker scheme where assessees could get their refund cheques. Like the refund banker scheme, the facility also would be available only for individual taxpayers. The refund banker scheme is in operation in Chennai, Kolkata, Mumbai, Bangalore, Delhi and Patna. After the pilot phase, it would be expanded to cover other cities.

Neft is a nationwide system to facilitate transfer of funds from any bank branch to any other bank branch. Here's how it will work: income-tax department would process an individual's tax return. If there is a case of a refund, it would forward the assessee's name to the bank in e-mode with the details, such as the assessee's bank account.

It will also authorise the bank to remit the specified amount to the assessee. At present, State Bank of India is acting as the refund banker for the department and the facility may also be launched through the bank.