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How to Claim TDS Refund Online?

Register on the Income Tax Department's website to claim a TDS refund online, file your income tax return, and verify it electronically, or send a signed physical copy to the department if necessary.

  • 10,542 Views | Updated on: Jun 13, 2024

Tax Deducted at Source (TDS) is a mechanism through which the government ensures that taxes are collected at the source of income generation. You can claim a refund if you find that excess TDS has been deducted from your income. Claiming a TDS refund online is a streamlined process that allows taxpayers to receive excess tax deductions efficiently.

What is an Income Tax Refund?

An income tax refund is the amount of money returned to a taxpayer by the tax authorities when they have paid more taxes during the financial year than their actual tax liability. This refund is typically claimed after the taxpayer files their Income Tax Return (ITR) and the tax department processes it.

What is a TDS refund?

A TDS refund is generated when the TDS payments surpass the calculated tax liability for the specific Financial Year.

How to Claim TDS Refund?

If the tax deducted differs from your actual tax liability, you can compute your taxable income and taxes, submit an income tax return (ITR), and request a refund.

Case 1: When your employer deducts more than the income tax payable

If your taxable income falls below the basic exemption limit, you can prevent a TDS deduction from your salary. However, if the actual tax payable is less than the TDS deducted, you must file an Income Tax Return (ITR) to claim a TDS refund. While filing the ITR online, you are required to provide your bank account details and IFSC code. These details are necessary for the Income Tax (IT) department to process the TDS refund.

Case 2: TDS deducted on fixed deposit

If your taxable income is below the basic exemption limit, you should submit a declaration in Form 15G to your bank at the beginning of the financial year, informing them that you do not have taxable income. Consequently, no tax (TDS) will be deducted on your interest income. If the bank deducts tax (TDS) on your interest income despite submitting the Form 15G declaration, you can claim a refund by filing your ITR.

Case 3: For senior citizens with FD accounts

Senior citizens aged 60 or above are exempt from tax deductions (TDS) on interest earned from bank deposits. However, this exemption applies only if the interest on deposits from each bank does not exceed ₹50,000 annually. If your interest income exceeds this threshold but your total income is below the basic exemption limit (after section 80 deductions), you can submit Form 15H to your bank at the beginning of the financial year, indicating that you do not have taxable income. If the bank still deducts tax on your interest income from your FD, you can claim a refund by filing your ITR.

Steps for Filing the TDS Return Claim

Filing the TDS claim accurately and on time is crucial to avoid penalties and ensure compliance with tax regulations. Here are the steps to file the TDS return online.

  • Provide the bank account number, name, and Indian Financial System Code (IFSC) details for successful processing.
  • If you know that the TDS is payable in any financial year, you must 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 from 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.

How to Claim TDS Refund Online in India?

Filing income tax returns is a straightforward step in claiming a Tax Deducted at Source (TDS) refund online. It includes the following steps:

  • Sign in or sign up on the online e-filing portal of the Income Tax Department, i.e., incometaxindiaefiling.gov.in
  • Fill in the relevant details in the applicable Income Tax Return (ITR) form.
  • On submission of the ITR, the portal generates an acknowledgment.
  • E-verify the acknowledgment through the digital signature, net banking account, or an Aadhaar-based one-time password (OTP).

What is the TDS Refund Process?

Tax Deducted at Source (TDS) is a mechanism implemented by the Indian government in which tax is deducted at the point of origin of income. This means that certain payments, such as salary, interest, rent, etc., are subject to tax deduction by the payer before being transferred to the recipient.

  • Register on the Income Tax Department’s website to file your TDS online.
  • Next, pre-validate your bank details by entering your bank account number and IFSC code, and nominate the bank account for a refund.
  • You can file your income tax return by downloading the appropriate ITR form following registration.
  • Fill in the necessary details, upload the form, and click the submit button.
  • Upon submission of the ITR, an acknowledgment is generated for the submitted form, which you must e-verify.
  • E-verification can be done using a digital signature, an Aadhaar-based OTP, or your net banking account.
  • However, if you are unable to e-verify the ITR, you can complete the verification process by sending a signed physical copy to the Income Tax Department.

How to Check TDS Refund Status?

You can verify the status of your TDS refund through the following methods:

  • Review the acknowledgment and refund processing email sent by the IT Department to your registered email address to ascertain the status of your TDS refund claim.
  • You can access the Income Tax website using PAN-based credentials to examine the return and track the progress of your refund.

What is the TDS Refund Period?

The Income Tax Department does not set a specific time frame for refunding. However, based on historical data, if you file your ITR on time, it typically takes 1 to 6 months for the refund to be credited to your bank account. The duration also depends on the completion of the e-verification process. Nowadays, once the ITR processing is complete, refunds are generally issued within a month.

Interest on TDS Refund

If the IT Department delays issuing your TDS refund, they must pay you the refund amount with a simple interest of 6% per annum under Section 244A of the Income Tax Act. This interest starts accruing from the first month of the assessment year if the ITR is filed by the due date and from the date of filing if the return is submitted after the due date. Note that no interest will be paid on the TDS refund if the return is filed past the due date.

Additionally, the IT Department will not pay any interest if the TDS refund amount is less than 10% of the total income tax payable. Furthermore, any interest received on the TDS refund is taxable under the head ‘Income from Other Sources.’

Types of Income Tax Refund Status

Your income tax refund status can fall into various categories, each indicating a specific stage of the refund process. Understanding these statuses can help you track your refund and take necessary actions if required. Here are the different types of income tax refund statuses:

Refund Paid

Refund Paid means that the Income Tax Department has processed your refund request and credited the refund amount to your bank account. You should check your bank statement to confirm the receipt of the refund.

No Demand No Refund

No Demand No Refund indicates that, upon processing your ITR, the Income Tax Department has determined that neither a tax demand (amount you owe) nor a refund is due to you.

Refund Unpaid

Refund Unpaid means that although the refund has been processed, it could not be credited to your bank account. This usually happens due to incorrect bank details, account closure, or issues with the bank.

Not Determined

Not Determined signifies that your ITR is still being processed, and the refund status has not yet been finalized. This is a common status soon after filing the return and before the department completes its assessment.

Refund Determined and Forwarded to the Refund Banker

Refund Determined and Forwarded to the Refund Banker means that the Income Tax Department has processed your refund and sent the details to the authorized refund banker.

Demand Determined

Demand Determined means that the Income Tax Department has found a discrepancy in your ITR, resulting in additional tax liability. Instead of a refund, you now owe money to the department.

Rectification Processed Refund Determined and Sent Out to Refund Banker

Rectification Processed Refund Determined and Sent Out to Refund Banker indicates that after you filed a rectification request to correct errors in your original ITR, the Income Tax Department has re-evaluated and determined that a refund is due.

Rectification Processed and Demand Determined

Rectification Processed and Demand Determined means that after processing your rectification request, the Income Tax Department has concluded that there is a tax demand instead of a refund.

Rectification Processed, No Demand and No Refund

Rectification Processed, No Demand, and No Refund indicates that the Income Tax Department has processed your rectification request and determined that no changes to the original assessment are required.

How to Apply for the TDS Rebate or Income Tax Return (ITR) in India?

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, 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.

Different Types of Income Tax Refunds in India

Income tax refunds bring a sense of relief and joy to taxpayers, who often eagerly await the return of overpaid taxes. This financial reimbursement can significantly boost one’s finances, and understanding the various types of income tax refunds is essential for taxpayers. There are two types of income tax refunds:

Regular Refund

This is the most common type of refund given to taxpayers who have paid more tax than their actual liability.

Refund Under Double Taxation Avoidance Agreements (DTAA)

Non-resident taxpayers eligible for benefits under DTAA may also claim a tax refund.

Documents Required to Claim Income Tax Refund in India

To claim an income tax refund, taxpayers need to submit the following documents:

  • Income Tax Return (ITR) Form
  • Form 16/16A
  • Proof of Investments
  • Bank Details

Requirements for Claiming Income Tax Refund

While filing taxes might seem daunting, the potential refund at the end of the fiscal year can be a rewarding outcome. To claim an income tax refund successfully, taxpayers must ensure the following:

Accurate Information

All details in the income tax return should be correct and match the supporting documents.

Timely Filing

File the income tax return within the stipulated due date for the assessment year.

Valid Bank Account

Provide the correct bank account details to avoid any issues in receiving the refund.

How to Claim Income Tax Refund in India?

The process of claiming an income tax refund involves the following steps:

File an Income Tax Return

Prepare and file the income tax return using the appropriate ITR form applicable to your income sources.

Verification

Verify the ITR electronically using Aadhaar OTP or EVC (Electronic Verification Code) or by sending a signed physical ITR-V to the Centralized Processing Center (CPC).

ITR Processing

After verification, the income tax department will process the ITR and calculate the refund amount, if applicable.

Refund Disbursement

Once processed, the refund will be credited directly to the taxpayer’s bank account.

Due Date to Claim Income Tax Refund

The due date for claiming an income tax refund is the same as when filing the income tax return for the relevant assessment year. Typically, the deadline is July 31st of the assessment year.

Reasons for Delay in an Income Tax Refund

Delays in income tax refunds can occur for various reasons, and understanding these factors can help taxpayers navigate the refund process more efficiently. Several reasons may cause a delay in income tax refund processing, including:

  • Incorrect Bank Account Details
  • Discrepancies in ITR
  • High Volume of Returns

How can You Check Your Income Tax Refund Status Through the e-filing Website?

To check the income tax refund status through the E-Filing Website, follow these steps:

  • Log in to the Income Tax e-filing portal using your credentials.
  • Click “View Returns/Forms” and select “Income Tax Returns” from the drop-down menu.
  • Select the relevant assessment year and click on “Submit.”
  • Click on the acknowledgment number of the ITR to view the refund status.

How can You Check your Income Tax Refund Status Through the TIN NSDL Website?

The Tax Information Network (TIN) maintained by the National Securities Depository Limited (NSDL) provides a user-friendly platform for taxpayers to check the status of their refunds quickly and efficiently. To check the income tax refund status through the TIN NSDL Website:

  • Visit the TIN NSDL website (tin.tin.nsdl.com).
  • Click “Status of Tax Refunds” under the “Services” section.
  • Select the relevant assessment year and enter your PAN and captcha code.
  • Click on “Submit” to view the refund status.

What Happens After You Make the TDS Refund Claim?

Upon filing your income tax return online, the IT Department assesses the information provided in the form, especially regarding any TDS refund claim. During the assessment phase, the IT Department sends you an intimation, which falls under Section 143(1), based on the outcome of the processing. This communication from the IT Department may indicate one of the following scenarios:

The tax calculation conducted by the IT Department aligns with your own calculations, resulting in no tax payable on your behalf.

The IT Department determines that your tax estimation is incorrect, leading to either additional tax liability or a rejection or partial acceptance of your tax estimation. In such cases, you may be required to pay additional tax or receive a revised refund different from the one initially specified.

Your income tax return matches the assessment conducted by the IT Department. Consequently, if applicable, you can receive any TDS refund amount in full. This refund will be credited to the bank account you specified during the filing process.

Key Takeaways

  • Register on the Income Tax Department’s website to initiate the TDS refund process.
  • File your income tax return online with accurate details regarding TDS deductions.
  • Ensure pre-validation of your bank account details for smooth refund processing.
  • Nominate the bank account where you want the TDS refund to be credited.
  • After filing, verify your return electronically using a digital signature, Aadhaar OTP, or net banking.
  • Alternatively, complete verification by sending a signed physical copy to the IT department.
  • Monitor your registered email for the IT Department’s acknowledgment and refund processing updates.

Final Thoughts

Claiming a tax refund is a process that can be accomplished in a few easy steps. First, ensure you are eligible for a refund by reviewing your tax return and assessing any deductions or credits you may be entitled to. Next, gather all necessary documentation, including receipts and supporting documents, to prove your claim. Then, file your tax return with the relevant tax authority, including a request for a refund. Once your claim is approved, you will get a direct deposit for the refund. It is important to remember that processing times may vary, and receiving your refund may take several weeks or even months.

FAQs on How to Get TDS Refund

1

If I have paid the excessive tax, will it be refunded?

Yes, if you have paid excessive tax, it will be refunded to you. The excess amount will be refunded by the Income Tax Department after processing your income tax return.

2

How to Request for Refund Reissue (in case of refund failure)?

To request a refund reissue in case of a refund failure, log in to the Income Tax Department’s e-filing portal and navigate to the “Refund Reissue Request” section. Follow the instructions provided to initiate the reissue process.

3

What are the reasons for refund payment failure?

Refund payment failure can occur for various reasons, such as incorrect bank account details provided in the income tax return, account closure, or discrepancies in the refund amount. Ensuring that your bank details are accurate is essential to avoid refund payment failures.

4

How many days will TDS be refunded?

The duration of a TDS refund varies depending on factors like the Income Tax Department’s processing time and the accuracy of the information provided in your income tax return. Generally, TDS refunds are processed within 1 to 6 months after filing the return.

5

Who is eligible for TDS deduction?

TDS deduction applies to individuals and entities making specified payments, such as salaries, interest, rent, commission, etc., above a certain threshold limit. Employers, banks, and other entities deduct TDS when making such payments, as per the provisions of the Income Tax Act.

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