How to Claim TDS Refund for Excess TDS Deduction?
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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 |
  • 134,028

Many of you may be curious about what TDS means. This article will address that question and several others, like how to claim an income tax refund.

Tax Deducted at Source (TDS) is the tax deducted from an individual’s salary before the amount is credited to his account. The deductor makes the deduction, which is deducted annually by employers. The employers deduct this amount each month. If the amount of TDS collected exceeds what you owe the government, you may be eligible for a TDS refund.

Let’s examine this idea in more detail.

What is a 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

  • File a TDS refund claim when the employer deducts more tax than the actual liability. You can claim the difference amount by filing an income tax return.
  • 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 lower income tax deduction benefit.
  • You need to know how to get a refund of TDS deducted by the bank. For example, 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.

  • Declare the income, and the Income Tax department will refund the amount to the bank account.
  • File Form 15G with the bank, so there is no deduction at the source since your salary does not fall under any tax slab. In addition, senior citizens are exempted from paying TDS from interest on fixed deposits.

How to Claim TDS Refund Online?

Claiming Tax Deducted at Source (TDS) refund online is a simple process involving filing 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).

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

The TDS refund process is straightforward. You just need to visit the income tax portal and log in 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 the 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?

After applying for a TDS refund, you must also know when the TDS amount will be refunded to your account. Follow these steps if you do not receive the TDS refund at the time mentioned above.

1. Download Form 26AS and compare it with your income and TDS details. In case of mismatches, get in touch with the TDS deductor to check 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 to 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 in 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 interest accrual 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 when the refund amount is lower than 10% of the total tax.

Safeguards to avoid double claims

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

Some important points to remember:

1. The threshold for TDS deduction varies according to the payment types. For example, the bank deducts TDS if the FD returns exceed ₹40,000 in a year. The said threshold is ₹50,000 in the case of senior citizens. Likewise, the TDS rate varies regarding 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 essential to mention the tax-saving instruments in the ITR accurately. 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 entered appropriately 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 claiming the refund while filing the return, you could file a revised return.

Now that you are aware of the TDS refund procedure and how to withdraw TDS amount online, you can go ahead and claim your rebate.

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