TDS Refund || Xltax

Register!

TDS Refund – How to claim TDS Refund

Tax Deducted at Source (TDS) is the sum that is deducted from a taxpayer’s income like salary, interest from bank accounts, rent etc. If the TDS collected is more than what you owe to the government, you can get a TDS Refund. Let us explore this concept in detail.

What is Income Tax Refund?

An income tax refund refers to the amount of money that a taxpayer receives from the government when they have paid more income tax during a particular financial year than what they owe. It represents a return of excess tax paid by the taxpayer to the tax authorities. When individuals or businesses pay their income tax through tax deductions at source (TDS), advance tax payments or self-assessment tax, they may end up paying more tax than their actual tax liability. This can occur if they have claimed excessive deductions or if their tax liability is reduced due to exemptions, deductions, or tax credits.

In such cases, when the taxpayer files their income tax return and the tax authorities assess their tax liability, they calculate the actual tax liability based on the income and deductions declared. If the assessed tax liability is lower than the tax paid, the excess tax amount is refunded to the taxpayer. Remember, you have to finish e-filing to get your Income Tax Refund.

Similarly, you can also claim a TDS refund of excess TDS deducted on salary due to non-submission of 80C investment proofs or rent receipts towards house rent allowance to the employer.

How to Claim TDS Refund?

Mainly, there are 3 instances in which you can claim TDS refund. Knowing about these instances in detail will help you understand how to claim TDS refund online or offline.

1. When More Tax Has Been Deducted by The Employer Than Applicable

a) If the actual tax payable does not equal the tax deducted at source, you need to calculate your income and taxes, file an Income Tax Return (ITR) [3]to claim TDS refund.
b) While filing the ITR online, you will need to provide the details of a bank account and its IFSC code. The Income Tax (IT) department will then use these details to give you a TDS refund.

2. When A Bank Has Deducted Tax on Fixed Deposit (FD):

a) When your income does not fall into a taxable income bracket, you need to submit a declaration in TDS refund form - Form 15G[5] to your bank in which you have an FD before the end of every financial year.
b) This is done to notify the bank about your non-taxable income, because of which TDS should not be deducted on the FD interest income.
c) If your bank has deducted TDS on your FD interest, whether you have submitted TDS refund form or not, you can claim TDS refund by declaring it in your ITR. The IT Department will compute TDS refund and get it credited to your bank account.

3. When You Have FD Accounts, Being a Senior Citizen:

a) As per Income Tax Act, Indian citizens above the age of 60 years are exempt from a tax deduction on FD interest up to Rs. 50,000 annually.
b) If you are above the age of 60, have FD accounts but no taxable income in any financial year (after claiming this deduction on FD interest), you need to fill and submit Form 15H to your bank.
c) If the bank still deducts tax on the interest income you have earned with the FD(s), you can claim a TDS refund while filing the ITR.

How to Claim TDS Refund Online in India?

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

1. Sign in or sign up on the online e-filing portal of the Income Tax Department, i.e., https://incometaxindiaefiling.gov.in/.

2. Pre-validate the bank details by entering the bank account number and IFSC and nominate the bank account for refund.

3. Fill in the relevant details in the applicable Income Tax Return (ITR) form.

4. On submission of the ITR, the portal generates an acknowledgement.

5. E - verify the acknowledgement through the digital signature, net banking account, or an Aadhaar-based one-time password (OTP).

How to check TDS refund status?

You can check the status of your TDS refund:

Check the acknowledgement and refund processing email sent by the IT Department to your registered email address to check the claim status of TDS refund.

Check the footprints of the return by logging to the Income Tax website using PAN based credentials.

What is TDS Status?

S.N.	Message Displayed	Meaning
1.	‘No e-filing has been done this year.’	It occurs when ITR is not filed or verified. Taxpayers need to re-verify ITR to change their status.
2.	‘Refund determined and sent out to refund banker.’	It signifies that ITR is under process and the application in question has been forwarded to the refund banker.
3.	‘Refund unpaid.’	This message signifies that the taxpayer has shared the wrong IFSC code with the IT department.
4.	‘Refund paid.’	It indicates that the refund has been paid.
5.	‘Not determined.’	The application in question was submitted in the last month and is yet to be processed.
6.	‘Sent for Refund’	It will occur if the application had been sent over a month ago and is processed for a refund.

In case the status is different than these, it would suggest that the TDS refund application is stuck.

What is the TDS Refund period?

The TDS refund period depends on various factors. If you have filed the ITR details on time, it can take anywhere between three to six months to receive the refund. The refund period will also depend on completing the e-verification.

How to verify the status of TDS Refund?

I. In case you haven’t received your refund, you can verify the status by log in to your e-filing account and follow the below steps:-

Step 1: Login to your e-filing account.

Step 2: Go to E-file> Income Tax Returns > View Filed Returns.

Step 3: Now under the relevant assessment year for which you want to check the IT refund status, click on ‘view details’.

Reasons for a Delay in Receipt of TDS Refund

Reasons for delayed refund: incorrect bank account details, scrutiny, or mismatches. Solutions include updating bank details, verifying return, or reaching out to IT department.

How to Raise a Complaint Against Delay in TDS Return?

In case of delay in receiving TDS refund, taxpayers can raise a complaint. It must be noted that they need to furnish a set of documents to receive the refund amount. For further assistance and prompt solution, they can reach out to Income Tax Ombudsman and provide these following details –
PAN Form 16
TDS certificate issued by the banking institution
Bank Statement
Documents that declare all investments made and earnings accrued in a financial year.

Steps to Apply for TDS Refund Reissue

Step 1: Income Tax Portal login page. Go to https://www.incometax.gov.in/iec/foportal and click on login. ...

Step 2: Select User Id. ...

Step 3: Refund Re-issue request. ...

Step 4: Create Refund Re-issue request. ...

Step 5: Assessment Year. ...

Step 6: Bank Details. ...

Step 7: Verify OTP. .....

Step 8: Submitted Refund Re-issue request.