written by Khatabook | June 9, 2021

TDS Refund: How To Claim TDS Refund

TDS (Tax Deducted at Source) is the tax that is deducted from the amount before payment to a person. In accordance with the 1961 income tax law, TDS is collected and administered by the Central Board for Direct Taxes (CBDT). The programme is managed by India Revenue Services (IRS) and is part of the Revenue Department. It is also important when an audit is performed. In addition, TDS is becoming important in the following ways:

  • Taxes are regularly collected and represent a constant mode of government income.
  • It also benefits the payer, because taxes are charged and deducted each month, the tax burden is lower at year-end.
  • This process is therefore designed in such a way that taxes can be collected without the assistance of the Income Tax Department.

What is TDS Refund?

TDS refund arises when the amount of tax deducted is higher than the amount of tax liability of the person at the end of the financial year. It is calculated after adding all the incomes earned from various sources and determining the tax liability. After the determination of tax liability the TDS is subtracted from it and if TDS is higher than the total tax liability for the financial year, then in that case TDS refund arises.

TDS Refund For Different Types Of Payment 

  1. When the employer deducts more tax than the actual tax payable:
  • When there is a mismatch between the tax deducted by the employer and the actual tax payable, you can file your income tax return and claim the refund. 
  • You are required to provide the Bank details including bank name and IFSC code in order to get the refund credited in your account. 
  • In case you do not have the taxable income, you can apply for a NIL or lower TDS certificate from the jurisdictional income tax officer and submit the order passed to the TDS deductor.
  1. TDS refund on fixed deposits of senior citizens:
  • If you are above 60 years of age and have a fixed deposit account, you can fill form 15H and submit the same to the bank to ensure that no income tax is deducted on fixed deposit interest earned
  • If the tax is deducted by the bank on the interest income, you can claim the refund by filing the income tax return.  
  1. TDS refund on fixed deposits:
  • If you don’t have taxable income, you can submit Form 15G to the bank before the end of the financial year to ensure that the bank does not deduct tax on the interest payment. 
  • If the bank still deducts the tax on the interest income, you can file the income tax return to claim the credit of the tax deducted. It is credited to your bank account.

Also Read: CBDT No TDS on GST Component

How To Claim TDS Refund?

Learn how to claim TDS refund in the following steps:

  • Step 1: File the income tax return where tax deducted is more than the tax payable.
  • Step 2: Provide the bank details including bank name, account number and IFSC code 
  • Step 3: After the return is filed the income tax officer processes your return and the refund is credited within a few months in your bank account.

How To Claim TDS Refund Online?

You can claim your TDS refund online by following the below-mentioned steps:

  • Step 1: Visit the official website of the Income tax department at incometaxindiaefiling.gov.in and register yourself on the portal.

  • Step 2: Login to the portal using the login details. 

  • Step 3: File the relevant ITR applicable to you and provide the relevant details required on the form. 
  • Step 4: After filing the ITR an acknowledgement is generated which must be e-verified using the digital signature, Aadhaar-based OTP or net banking account.

Also Read: TDS Rate Chart For FY 2021-22

How Long Does It Take To Get TDS Refund?

If you have filed your income tax return on time then it usually takes three to six months to receive the refund. It also depends on the completion of e-verification of return.

How To Check Online Status Of TDS Refund?

You can check the status of TDS refund by following the below-mentioned steps:

  • Step 1: Visit the e-filing website and login to your account using the date of birth/date of incorporation, user ID, password and captcha.

  • Step 2: Visit the ‘My account’ section.
  • Step 3: Select ‘refund/demand’ status.
  • Step 4: The reason, assessment year, status and mode of payment is displayed.

How To Verify TDS Refund Status?

If you have not received the refund, you can verify the status by downloading and verifying your Form 26AS with your TDS details and income details. You can also contact your jurisdictional income tax officer or Ombudsman Income Tax department with the details including your PAN number, form 16, bank statement, TDS certificate issued by your bank and other documents showing your investments and earnings. Or you can also raise a complaint through an e-filing account.

Interest On TDS Refund 

If the TDS is not refunded within the given time period then the income tax department pays simple interest on the refund amount at the rate of 6% applicable as per the provisions of section 244A of the Income Tax Act. 

If the TDS refund amount is less than 10% or income tax payable, the Income Tax department need not pay interest on the refund amount. The interest accrues from the first month of the assessment year if the ITR is filed within the due date and from the date of filing of return in any other case.

As per provisions of  section 244A of The Income Tax Act,1961," Where a refund of any amount becomes due to the assessee under this Act, he shall  be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely :

  • Where the refund is out of any tax collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of 1.5% for every month or part of a month comprised in the period:
    • From the 1st day of April of the assessment year to the date on which the refund is granted, if the return of income has been furnished on or before the due date specified under sub-section (1) of section 139; or
    • From the date of furnishing of return of income to the date on which the refund is granted.
  • Where the refund is out of any tax paid under section 140A, such interest shall be calculated at the rate of 1.5% per cent for every month or part of a month comprised in the period, from the date of furnishing of return of income or payment of tax, whichever is later, to the date on which the refund is granted:

Provided that no interest shall be payable if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment;

  • In any other case, such interest shall be calculated at the rate of one-half per cent for every month or part of a month in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted.

In a case where a refund arises as a result of giving effect to an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264, otherwise than by making a fresh assessment or reassessment, the assessee shall be entitled to receive, in addition to the interest payable under sub-section (1), an additional interest on such amount of refund calculated at the rate of 3% per annum, for the period beginning from the date following the date of expiry of the time allowed under sub-section (5) of section 153 to the date on which the refund is granted.

  • Where refund of any amount becomes due to the deductor in respect of any amount paid to the credit of the Central Government under Chapter XVII-B, such deductor shall be entitled to receive, in addition to the said amount, simple interest thereon calculated at the rate of one-half per cent for every month or part of a month comprised in the period, from the date on which
    • Claim for refund is made in the prescribed form
    • Tax is paid, where refund arises on account of giving effect to an order under section 250 or section 254 or section 260 or section 262,to the date on which the refund is granted.
  • If the proceedings resulting in the refund are delayed for reasons related to the assessee or the deductor, as the case may be, whether wholly or in part, the period of the delay so related to him shall be excluded from the period for which interest is payable and where any question arises as to the period to be excluded, it shall be decided by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner whose decision thereon shall be final.

Also Read: Tax Deducted At Source For Business

Various Refund Status Shown 

There are different TDS Refund Statuses. They are mentioned below:

  • No e-filing has been done in this assessment year.
  • Refund paid.
  • ITR processed.
  • Refund unpaid.
  • Demand determined.
  • Not determined.
  • No demand no refund.
  • Refund determined and sent out to the Refund Banker.
  • Contact Jurisdictional Assessing Officer.
  • Rectification processed refund determined and sent out to Refund Banker.
  • Rectification processed demand determined.
  • Rectification processed no demand no refund.

Procedure For Raising Complaint In Case Of Delay 

In case you have not received the refund even after applying for ITR or there is delay in the TDS refund then you can file a dispute with your jurisdictional Income tax officer. You need to provide the following details and documents for the same:

  • Your PAN number.
  • Form 16.
  • Bank statement.
  • Documents showing your investments and earnings.
  • TDS certificate issued by your bank.

Conclusion 

If you have income tax liability lower than the income tax deducted by the payer then you can claim your TDS refund by following the procedure mentioned above. You can easily claim the refund of TDS by filing the ITR or submitting form 15G/15H in order to ensure that the payer does not deduct the tax while making the payment.

Also Read: TDS On Salary Under Section 192

FAQ

How can I know the amount of tax deducted by the payer from my income?

You can check the amount of TDS deducted by viewing the form 26AS from your e-filing account at incometaxindiaefiling.gov.in. You can also ask the payer to furnish the TDS certificate in respect of tax deducted by him.

What should I do if the TDS deducted is not reflected in form 26AS?

In case of TDS credit not being reflected in your Form 26AS, you should contact your payer. It can be due to several reasons like quoting of incorrect PAN of the deductee in the TDS statement file by the payer, non-filing of TDS statement by the payer.

Can I claim my TDS refund even if I have not received a TDS certificate from the deductor?

Yes, you can claim your TDS refund as per the details reflecting in the Form 26AS. In case you do not receive TDS certificate from the deductor you can claim the refund as per the details reflecting in Form 26AS. However, if there is any difference between tax actually deducted and tax credit being reflected in Form 26AS you should contact the deductor and reconcile the difference.

Can I claim TDS refund offline?

No, you cannot apply for TDS refund offline. You need to apply for the refund online on the official site .

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