How to Claim TDS Refund: A Detailed Guide
All Indian nationals who earn more than a certain amount are required by the country's tax laws to pay taxes at the current tax slab rates. However, the employer deducts Tax Deducted at Source (TDS) prior to the salary being deposited to your account. Consequently, when you file your income tax returns (ITR) for the fiscal year, you are eligible to get a TDS refund. If you have the required paperwork, the TDS (Tax Deducted at Source) refund procedure is simple and quick. You may now readily track TDS refunds because of the widespread use of the internet and advancements in digital technologies. In this article, we will explain the process for claiming a TDS refund in detail.
Table of Contents
What is a TDS Refund?
When the taxes paid through TDS exceed the total amount of taxes due for the fiscal year, a TDS refund is issued. It is computed following the consolidation of earnings from multiple sources. As taxpayers, we are all divided into different tax slabs. Let's say you have a savings account and receive interest revenue from it. Banks charge a standard 10% TDS on accrued interest. You can now get a TDS refund for the extra amount withheld if you are in the 5% tax rate. In a similar vein, you may also request a TDS refund for any excess TDS withheld from your pay because you failed to provide your employer with documentation of 80C investment or rent receipts for your housing rent allowance. You would add up all of your income from different sources, calculate your tax burden, and deduct the TDS that was withheld during the fiscal year when you filed your ITR. A rebate from the government is owed if the TDS exceeds your entire tax liability for the fiscal year.
How to Claim a TDS Refund?
You can determine your taxable income and taxes, file an income tax return (ITR), and request a refund if the amount of tax deducted does not equal the amount of tax owed. Your bank name and IFSC code will be requested during the ITR filing procedure. The IT department will find it simpler to return the extra tax you paid as a result.
Situation 1: When the amount your employer deducts exceeds the amount of income tax due
You can avoid having TDS deducted from your pay if your taxable income is less than the basic exemption amount. You must file an Income Tax Return (ITR) in order to receive a refund of TDS if the actual tax owed is less than the TDS. You must enter the IFSC number and bank account information when submitting the ITR online. To provide a TDS refund, the Income Tax (IT) department needs certain details.
Situation 2: TDS deducted on fixed deposits
Give your bank a declaration in Form 15G at the start of the fiscal year to inform them that you don't have any taxable income if your taxable income is below the basic exemption limit. As a result, your interest income would not be subject to tax deductions (TDS). You can file your ITR to get your money back if the bank takes tax (TDS) out of your interest income even though you filed the Form 15G statement.
Situation 3: Senior citizens with fixed deposits
Tax deductions (TDS) on interest received from bank accounts are not available to senior persons 60 years of age or above. Nonetheless, if interest on deposits from each bank exceeds Rs. 50,000 per year, the exemption is valid. You can notify your bank that you don't have taxable income at the start of the fiscal year by submitting Form 15H if your interest income exceeds the aforementioned threshold limit but your total income (after section 80 deductions) is less than the basic exemption level. By submitting your ITR, you can request a refund if the bank continues to withhold taxes on your interest income from your FD.
Filing the TDS Return Claim
To prevent fines and guarantee adherence to tax laws, it is essential to submit the TDS claim promptly and precisely. To file the TDS return online, follow these instructions.
For processing to be successful, supply the name, bank account number, and Indian Financial System Code (IFSC).
To receive a lower-income tax deduction benefit, you must file Form 13 under Section 197 if you are aware that the TDS is due in any given fiscal year.
You must understand how to get the TDS that was taken out of your bank account refunded. You have two options for requesting a refund, for instance, if your income tax is lower but the bank has withheld more tax from your fixed deposit.
The income tax authorities will return the money to your bank account after you declare your income.
Steps to Claim TDS Refund Online
Step 1: You must first register on the IT department's website at https://incometaxindiaefiling.gov.in/ in order to submit an online TDS claim.
Step 2: After registering, you can download the appropriate ITR form and file your income tax return. After completing the required fields and uploading the form, click "Submit."
Step 3: You must e-verify the acknowledgement that is created for the ITR that was filed. A digital signature, an OTP based on Aadhaar, or your net banking account can all be used for e-verification.
Step 4: However, you can finish the verification process by providing a signed hard copy of the ITR to the IT department if you haven't been able to e-verify it.
Steps to Verify the TDS Refund Status
If your refund hasn't arrived, you can check its status by logging into your e-filing account and taking the actions listed below:
Step 1: First, access your e-filing account and log in.
Step 2: Select Income Tax Returns under E-file. See the Filed Returns.
Step 3: Click "view details" under the appropriate assessment year for which you wish to verify the status of your IT refund.
Step 4: Click the "refund status" link if the ITR has been processed and a refund is due. The screen will provide all of your ITR filing information, including the dates of filing, e-verification, processing, and refund issuance.
Interest on TDS Refund
The sum must be paid to you with interest of 0.5% for each month or a portion of each month (i.e., 6% annually) if the IT department is late in paying you the TDS refund as applicable. The Income Tax Act's Section 244A has this clause. If an ITR is filed before the deadline, this interest starts to accrue in the first month of the assessment year; if not, it starts on the date the returns are filed. Note that if the refund is less than 10% of the tax owed, no refund will be given; likewise, if the return is less than Rs. 100, no refund will be given. Furthermore, any interest received may be subject to taxation under the heading of "income from other sources”.
Income Tax Refund Status Types
The following table shows different income tax refund types that taxpayers should know about:
Refund Status | Meaning | Action to be Taken |
Refund paid | The ITR filing is processed, and your account gets credited with the refund | Verify the refund with the bank |
No demand no refund | No need to pay taxes or not eligible for refunds | After requesting a refund, check the comparison that the IT Department sent you and, if required, submit a revised return |
Refund unpaid | The IT department accepts a refund, but it cannot be paid due to an error in bank or address details | Raise a request for refund reissue and update the appropriate information on the IT portal |
Not Determined | ITR has not yet been processed | Recheck the ITR status in a few days |
Refund determined and forwarded to the refund banker | IT Department accepts the refund request, and the refund banker is notified | Wait for the refund to be credited or contact the refund banker to learn about the status of the refund |
Demand determined | An additional tax obligation to be paid because the tax calculation differs from that of the IT department | To find the discrepancy or inaccuracy, confirm the computation made in accordance with 143(1). If a mistake is found, it should be fixed by paying the IT department within the allotted period. If there isn't a mistake, submit a correction together with all the documentation and supporting data needed to back up the refund request |
Rectification processed refund determined and sent out to refund banker | Correction return accepted, and the refund amount recalculated and sent to the bank for processing | Check your bank account to confirm refund receipt |
Rectification processed and demand determined | The correction return accepted, but there are unpaid tax obligations (demands) to be paid within a certain timeline | After cross-checking the information within the designated timeline, pay the outstanding tax demand |
Rectification processed, no demand and no refund | The IT department acknowledged a corrected return and you are not required to pay any additional tax or liable for a refund | - |
What Happens After the TDS Refund Claim
Your information is processed by the IT Department once you submit your income tax return online along with a TDS refund claim. Depending on the outcome of the processing, you will receive an alert when the IT Department begins evaluating your income tax return. Under Section 143(1), the IT Department will notify you in such a situation, and it may include one or both of the following:
According to the IT Department's calculations, the tax paid is accurate, and you are not liable for any taxes.
According to the IT Department's computation, your tax estimate is inaccurate; as a result, you may be required to pay additional taxes or your tax estimate may be rejected or only partially accepted, providing you with a different sum than what you had stated.
The IT department's income tax return is the same as yours. This implies that you have the right to receive the full TDS refund amount (if any excess was paid) in the bank account you designated.
As said, you can check the progress of your TDS refund online. As an alternative, the IT Department will notify you of the outcomes of your income tax return via your registered email address and mobile number. The email will also provide the refund amount and the reference number you can use to trace the TDS refund amount if your income tax return was filed correctly and the taxes match, either fully or partially. Your registered bank account will receive a direct transfer of the TDS refund from the IT Department. Subject to specific requirements, the IT department will also reimburse you interest for late payments if your TDS refund is delayed.
Steps to Follow on Not Receiving TDS Refund
You can take the actions listed below if, after three to six months of the income tax assessment order, you have not received your TDS refund:
Download Form 26AS, then check the information against your income and TDS amount. To confirm the accuracy of the TDS returns filed, get in touch with your TDS deductor if the information does not match.
Speak with the regulator or the authorised income tax officer. Their contact information is available on the internet e-filing portal.
Conclusion
There are a few simple actions you can take to get your tax refund. Examine your tax return and determine whether you qualify for a refund by determining any credits or deductions you may be eligible for. After that, collect all the records you'll need to support your claim, such as receipts and supporting evidence. Next, submit your tax return, along with a refund request, to the appropriate tax authority. You will receive a direct deposit for the reimbursement as soon as your claim is accepted. It's crucial to keep in mind that processing periods can differ and that it could take weeks or even months to get your refund.
FAQ
Q1. Who is eligible for a TDS deduction?
Individuals and organisations who make certain payments over a predetermined level, such as salary, interest, rent, commission, etc., are subject to the TDS deduction. According to the terms of the Income Tax Act, TDS is withheld by banks, employers, and other organisations when they make such payments.
Q2. How many days will TDS be refunded?
The length of time it takes to get a TDS refund varies based on a number of factors, including the accuracy of the information you provided on your income tax return and the processing time of the Income Tax Department. TDS refunds are typically handled one to six months following the filing of the return.
Q3. When can you make the TDS refund claim?
You must file your tax returns by July 31 of each assessment year. However, you can receive the excess tax money reversal or tax claim sooner if you begin your income tax filing process early.
Q4. Will I get a refund if I have paid the excessive tax?
Yes, you will receive your money back if you paid too much in taxes. You must first file your ITR before your return can be processed in order to receive your additional tax refund. The government will use ECS to return any overpayments of taxes to your bank account. Make sure your bank account is prevalidated, though.
Q5. Do I need to provide any documents for proof while filing my tax returns?
When submitting your ITR, you are not required to include any supporting documentation. However, in order to effectively file your income tax returns, you will need to supply your Aadhaar details.
Q6. What are the reasons for refund payment failure?
For the following reasons, an income tax department refund that is due may not be credited to your bank account:
If there is no pre-validation of the bank account. Pre-validating your bank account is now required.
The name on the bank account and the information on the PAN card are different.
When the IFSC code is invalid.
If you have closed the account you listed on the ITR.
Q7. My employer deducted Rs 50,000 as TDS, but deposited only Rs 30,000. I filed my ITR, and the full TDS was refunded, but the income tax department refunded Rs 30,000. What should I do?
Only the tax amount deposited to the income tax department is eligible for an income tax refund. You are not eligible for a refund unless the tax amount that was withheld is deposited to the government. You are not eligible for a refund until your employer pays the remaining TDS amount.
Q8. The status on the TIN website indicates that the refund had been adjusted against the outstanding tax demand of the previous year. What does that imply?
This indicates that the current year's income tax refund has been partially or completely offset by the unpaid demand from the prior assessment year. For information on the outstanding demand, get in touch with the Ward Assessing Officer or CPC Bangalore. By signing into the e-filing site, you can find out more about e-filed returns.
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