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Steps to Claim TDS Refunds

You can claim the TDS refund online through the Income Tax Department's website. Learn how to do it in this blog.

  • Jan 31, 2022
  • 2,256 Views

Updated on: 23rd August, 2023

Taxes are essential to a country’s economic system, and understanding the intricacies of tax deductions is crucial for individuals and businesses alike. Among the various tax-related concepts, TDS (Tax Deducted at Source) plays a significant role in ensuring a smooth flow of tax revenue to the government.

Key Takeaways

  • TDS refund is a process where taxpayers can get back the tax deducted at source if the amount deducted is more than the actual tax liability.
  • There are different types of TDS refunds, such as refunds for discrepancies between tax slabs and fixed deposits, refunds for taxes paid in excess of the tax slab, and refunds for senior citizens.
  • The TDS refund period is when the Income Tax Department processes and initiates the refund after processing the income tax return.
  • Taxpayers can check the status of their TDS refund online through the Income Tax Department’s website.

According to our country’s Income Tax Act rules, all Indian nationals earning more than a certain amount of money must pay their share of taxes as per the tax slab rates pre-defined by the government. Although the employer deducts an amount called the Tax Deducted at Source or TDS before the salary is deposited to the employee’s bank, there are TDS exemptions and refund options available when you file your Income Tax Returns (ITR) for the fiscal year to help taxpayers deal with discrepancies

The TDS refund procedure is simple and quick if you have all the relevant paperwork. Moreover, owing to the advancements in digital technologies and the widespread use of the Internet, you can now readily track your TDS refund details and status even in the comfort of your living room. This blog will help you analyze the types and benefits of TDS, types of refund statuses, and interest on TDS refunds. It will also guide you to file a TDS refund.

Understand What is TDS Refund

The advent of digitization has made it easier to claim a TDS refund online. But before understanding the entire process of claiming the refund, it is important to understand when and why you would require to claim a TDS refund.

On several occasions, investment estimates made at the beginning of a fiscal year don’t represent the actual investments achieved towards the end of that fiscal year. Hence, whenever the tax amount collected exceeds the actual tax due, you are eligible to claim a TDS refund. A TDS refund can be claimed and filed for when there is a discrepancy between both the amount of tax deducted at the end of a fiscal year and the income tax you are required to pay for that year.

Types of TDS Refunds

It is important to know when and how you can refund your TDS. There are several types of TDS refunds; take a look at a few of them:

Discrepancy Between Tax Slab & Fixed Deposits

If your salary is not under the tax bracket and your bank has collected tax on your fixed deposit income, you can claim a TDS refund both online and offline. You can claim this refund when you file an IT return or fill out Form 15.

Tax Paid Is Greater Than Tax Slab

Once you submit your income tax return, you can correct any discrepancies between both the tax deducted by your company and the actual tax due. When filing your income tax return, you must provide the name of your bank as well as the IFSC number.

Senior Citizens & Fixed Deposits

Tax deductions on the interest received on fixed deposits are not applied to senior citizens. If you are over 60 years of age and have fixed deposit accounts, you must fill out and send Form 15H to guarantee that your bank does not withhold income tax on your FD interest.

What is the TDS Refund Period and How to Verify the Status of TDS Refund?

The TDS refund period refers to the time the Income Tax Department takes to process and initiate the refund after processing the income tax return. The refund period may vary depending on various factors, including the accuracy of the return, the volume of refunds to be processed, and the efficiency of the processing systems. In general, the TDS refund period can range from a few weeks to a few months.

To verify your TDS refund status, you can follow the steps mentioned earlier to check the TDS refund status online. You can also contact the Income Tax Department’s customer care helpline or email the Centralized Processing Center (CPC) for inquiries related to your TDS refund.

Interest on TDS Refund

In some cases, the Income Tax Department may be delayed in processing TDS refunds. If the refund is not issued within a certain time frame, the taxpayer may be entitled to receive interest on the refund amount. As per Section 244A of the Income Tax Act, if the refund is delayed beyond the prescribed time limit (usually three months from the end of the assessment year), the taxpayer is eligible to receive interest at the rate of 0.5% per month or part thereof on the refund amount.

How To Claim TDS Refund Online?

The procedure for requesting a TDS refund is straightforward. If your company has deducted more than your actual tax burden, you can request a TDS refund by following these steps:

  • Step 1
  • The data structure for e-TDS/e-TCS returns is available at

    https://www.protean-tinpan.com/services/etds-etcs/etds-rpu.html.

  • Step 2
  • Prepare the e-TDS/e-TCS return in clean text ASCII format with ‘txt’ as the file extension. You can use the Return Preparation Utility provided by Protean (formerly NSDL eGov) or any other third-party software to do this.

  • Step 3
  • Once the file is prepared, verify it using the File Validation Utility (FVU) provided by Protean (formerly NSDL eGov).

  • Step 4
  • If the file has any errors, the FVU will give a report of the errors. Correct the errors and verify the file again using the FVU.

  • Step 5
  • The generated .fvu file can be uploaded or submitted to the TIN-FC https://www.incometax.gov.in/iec/foportal/ website.

In the TDS refund form, the payback sum will appear in the ‘Refund’ row. The reflected total is merely a rough estimate and will not be repaid as the final assessment amount. Once the IT Department has processed your case, the real TDS refund will be determined.

How to Check TDS Refund Status?

You can check your TDS refund status online through the official website of the ITD (Income Tax Department) of India. Follow these steps:

  • Visit the Income Tax e-filing portal at https://www.incometaxindiaefiling.gov.in/
  • Log in to your account using your PAN (Permanent Account Number) as the user ID, password, and captcha code.
  • Once logged in, click on the “View Returns/Forms” option from the dashboard.
  • Pick the option “Income Tax Returns” from the drop-down menu.
  • Choose the relevant Assessment Year for which you are expecting a TDS refund.
  • Click on the acknowledgment number of the return for which you want to check the refund status.
  • The status of your TDS refund will be displayed on the screen.

Types of Income Tax Refund Status

The Income Tax Department provides different statuses for income tax refunds based on the stage of processing. Here are some common income tax refund statuses:

  • Return Submitted and Being Processed
  • This status indicates that the Income Tax Department has received your income tax return and is currently processing it.

  • Refund Approved
  • This status means that the processing of your return has been completed, and the refund amount has been approved for disbursement.

  • Refund Paid
  • This status indicates that the refund amount has been credited to your bank account.

  • Refund Failed
  • If there are any issues with the bank account details provided, the refund may fail, and this status will be displayed.

  • Refund Reissue Request Received
  • In case the refund could not be credited to the taxpayer’s account, they may request a reissue, and this status indicates that the reissue request has been received by the Income Tax Department.

Concluding Thoughts

TDS benefits are not restricted to government and development work for the country; they also include some significant benefits for you in the case of a TDS difference for a refund process and various tax exemptions. By staying informed about TDS and diligently fulfilling our tax obligations, we contribute to the nation’s progress and ensure a robust and prosperous future for ourselves and generations to come. Embrace the knowledge this blog shares and navigate the TDS landscape confidently and efficiently. Together, we can build a financially strong and compliant society that thrives on the principles of transparency and accountability.

FAQs

1

Does tax not apply until a certain minimum amount?

The Income-tax Law has established a threshold limit for a number of items that are subject to TDS. There is no need to withhold tax at source if the amount spent or paid during the year is below the threshold limit.

2

Can the beneficiary of the payment ask the payer not to deduct any TDS from the payment before they make it?

A payee may approach the payer for non-source-deduction of tax. Still, in order to do so, they must provide the payer with a declaration in Form No. 15G/15H, as appropriate, stating that the tax on the payer’s estimated total income for the prior year, including the income on which tax is to be deducted, will be zero.

3

What should one do if tax is deducted but the payee’s actual tax liability is zero or less than the TDS amount?

In this situation, the payee can file an income tax return to request a refund of the entire or excess TDS amount (as applicable).​

4

How can I find out how much tax the payer has taken out of my income?

You can ask the payer to give you a TDS certificate for the tax he deducted from you in order to find out the amount of tax that he deducted. Using your e-filing account at https://incometaxindiaefiling.gov.in, you can also check Form 26AS.

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