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How to Claim TDS Refund for Excess TDS Deduction

How to Claim TDS Refund for Excess TDS Deduction
  • 1st Oct 2019 |
  • 127,866

Tax Deducted at Source (TDS) is the tax, which is deducted from the salary of an individual before the amount is credited to his account. The deduction is done by the deductor and it is deducted every month by employers.

What is TDS refund?

Individuals who have made financial declarations at the start of the year, which are less than the proof of investment submitted at the end of the year, will be eligible for a TDS refund. If the projected investments declared at the beginning of the year are less than the actual investment made at the end of the year, a situation for a refund will arise. The sooner you file the income tax return, the earlier you can get the TDS refund.

Steps for filing the TDS return claim

You need to file a TDS refund claim when the employer has deducted more tax than the actual liability. You can claim the difference amount by filing an income tax return. You will have to provide the bank account number, name of the bank, and Indian Financial System Code (IFSC) details for successful processing. If you know that the TDS is payable in any financial year, you need to file Form 13 under Section 197 to avail of a benefit of a lower income tax deduction.

You need to know how to claim TDS refund in case of a deduction by the bank. If the income tax is less but the bank has deducted more tax on your fixed deposit, you can claim a refund in two ways. One way is to declare the income and the I.T. department will refund the amount in the bank account. The other way is to file Form 15G with the bank so that here is no deduction at source since your salary does not fall under any tax slab. Senior citizens are exempted to pay TDS from interest on fixed deposits.

How to Claim TDS Refund Online?

Claiming Tax Deducted at Source (TDS) refund online is a simple process and involves the filing of income tax returns. It includes the following steps:
1 - Sign in or sign up on the online e-filing portal of the Income Tax Department, i.e. incometaxindiaefiling.gov.in
2 - Fill in the relevant details in the applicable Income Tax Return (ITR) form.
3 - On submission of the ITR, the portal generates an acknowledgement.
4 - E-verify the acknowledgement through the digital signature, net banking account, or an Aadhaar-based one-time password (OTP).

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How to apply for the TDS rebate or Income Tax Return (ITR)

The TDS refund process is very simple. You just need to visit the income tax portal and login to download the relevant form for an income tax refund. Enter all the particulars and submit the form. If the employer has deducted tax when you are not eligible for it, you can claim the amount by filing income tax returns (ITR).The department will review the taxable amount and you will receive the amount directly in your bank account.

How to check TDS refund status?
Visiting the online e-filing portal helps in knowing the refund status.
1 - Log in to your account.
2 - Check out the section labelled ‘My Account’ and select ‘Refund/Demand Status’.
3 - This reflects the assessment year, the status and the mode of payment. In case of rejection, the corresponding reason is mentioned here as well.

How to verify the status of a TDS refund?
In case you do not receive the TDS refund in the above mentioned time frame, you can follow the steps given below.
1 - Download Form 26AS and compare it with your income and TDS details. In case of any mismatches, get in touch with the TDS deductor to check on the accuracy of the TDS returns they filed.
2 - Contact the concerned income tax officer or the ombudsman. Their contact details are available on the online e-filing portal.

What is the TDS refund period?
If the ITR is filed on time, you can expect the refund to get credited in your bank account in three to six months. The credit is also a function of the completion of the e-verification formality.

Steps for raising a complaint about the delay in receiving ITR

If you have not received the refund even after you applied for ITR, you need to get in touch with the officer to file a dispute. Provide all the information and details. If there is no response, you can contact the Income Tax Ombudsman with your PAN, Form 16, bank statement, TDS certificate issued by the bank, and documents that show earnings and investment.

Interest on TDS refund
In case of delays in refunding the TDS amount, the Income Tax Act entitles you to receive interest. The interest is calculated at a simple rate of 6%. The accrual of interest takes place from the first month of the financial year, i.e. April, and is taxable under ‘Income from Other Sources.’ However, the interest is not applicable where the amount of refund is lower than 10% of the total tax payable.

Safeguards to avoid double claims
While approving the refunds, the assessing officer takes due care to avoid double claims. Hence, in case of errors, while claiming the refund, you must have supporting documents to prove that it was genuine.

Some important points to remember:
1 - The threshold for TDS deduction varies according to the payment types. For example, where the FD returns exceed INR 40,000 in a year, the bank deducts TDS. The said threshold is INR 50,000 in case of senior citizens. Likewise, the rate of TDS varies in case of salaries, professional fees, etc. The TDS rate also differs according to the nature of the payment.
2 - The refund is applicable when the paid TDS amount exceeds the tax liability.
3 – It is important to mention the details of the tax-saving instruments accurately in the ITR. For instance, the premiums paid under an insurance policy are allowed as a deduction under Section 80C . However, duly note that you must not consider insurance solely as a tax-saving product. You must get coverage from a reputed insurance player like Kotak Life to avail the best protection plans.
4 - The bank details should be properly entered to receive the refund in your bank account. Incorrect details can cause delays in receipt or non-receipt of the refund amount.
5 - If you missed on claiming the refund while filing the return, you can file a revised return.

Now that you are aware of the TDS refund procedure, you can go ahead and claim your rebate.

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