Business PlanTaxationTDS

Excess TDS Deduction: How to Get a TDS Refund

This article will explain the situation of paying excess TDS deducted due to a miscalculation. We will include the entire procedure on how to claim a TDS refund. After this, we guide them on how to check the refund status.

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TDS (Tax Deducted at Source) is a tax deducted from an individual’s salary before the money is deposited into his account. The deductor makes the deduction, and employers deduct it every month.

What Is a TDS Refund?

Individuals who filed financial declarations at the beginning of the year less than the proof of investment filed at the end of the year will be entitled to a TDS refund. 

A refund will occur if the expected investments announced at the beginning of the year are less than the actual investment made at the end of the year. The earlier you file your income tax return, the sooner you receive your TDS refund.

Procedure To Claim TDS Refund

The Income Tax Department maintains an official website where people can pay their taxes and file returns and refund claims. The following is the procedure for requesting a TDS refund in the event of an overpayment or deduction:

  • There are no special forms for requesting a TDS refund. The taxpayer must include the income tax calculation, including the tax payable and TDS deducted when filing income tax returns. The refundable TDS is displayed when these data are entered into the site.
  • After the Income Tax officer sanctions the TDS return, it might take many months to return the TDS. In addition to the refund, a 6% annual interest rate is paid. This interest rate applies only when the refund amount is greater than 10% of the total tax due for the fiscal year. The taxpayer would also get an intimation of the interest computation, as required by Section 143 (1).
  • If the taxpayer is not satisfied with the computation, he can contact the income tax officer or request a comprehensive report online. The extra TDS deducted will be credited to the taxpayer’s bank account, which must be specified when completing income tax returns electronically.

How To Claim TDS Refund Online?

Tax Deducted at Source (TDS) refunds can be claimed online and require the submission of income tax forms.

 It entails the following procedures:

  • Sign in or create an account on the Income Tax Department’s online e-filing site,
  • Fill out the appropriate Income Tax Return (ITR) form with the necessary information.
  • The portal produces an acknowledgement after the ITR is submitted.
  • Use a digital signature, a net banking account, or an Aadhaar-based one-time password to e-verify the acknowledgement (OTP).

How To Check The TDS Refund Status?

The TDS refund status can be monitored on the site once it has been processed. The taxpayer’s account on the site will contain information such as the date of refund acceptance and processing data. 

The taxpayer must provide their PAN card number, and the year they seek a refund. A clarification notice will be provided to the taxpayer if the Income Tax Department does not comply with the refund applied.

What Is The Procedure For Checking The TDS Refund Status?

If you do not get your TDS refund within the time range of three to six months, you can take the measures outlined below.

  •  Get a copy of Form 26AS and compare it to your income and TDS information. If there are any discrepancies, contact the TDS deductor to double-check the correctness of the TDS returns they filed.
  •  Get in touch with the appropriate income tax officer or the ombudsman. Their contact information may be found on the online e-filing site.

How To File A Complaint Regarding A Delay In Getting An ITR,?

If you have not received your refund after filing your ITR, you should contact the officer to initiate a dispute. Please provide all pertinent facts and information. 

If you do not receive a response, you can approach the Income Tax Ombudsman with your PAN, Form 16, bank statement, bank TDS certificate, and documentation showing earnings and investments.


Safeguards To Avoid Double Claims

The Assessing Officer must take the following safeguards to avoid both the deductor and the deductee from claiming TDS twice:

Before the Assessing Officer, the application deductor must show that:

  • It is a fundamental error that happened accidentally;
  • the TDS certificate for the refund amount sought has not been granted to the deductee(s);
  • The excess amount credit has not been claimed by the deductee(s) in the return of income, or the deductee(s) agrees not to claim such credit.
  • The Additional Commissioner’s consent is necessary for refunds in excess of ₹1 lakh. The Commissioner’s consent is necessary for reimbursement in excess of Rs. 10 lakhs. The balance money may be reimbursed to the deductor once any current tax due has been met.

Some Important Points To Remember

Following are some of the crucial points to remember with regards to the TDS refund.

  • The TDS deduction threshold varies depending on the kind of payment. TDS is deducted by the bank when FD returns surpass ₹40,000 in a year. In the case of elderly persons, the stated barrier is ₹50,000. Similarly, TDS rates vary depending on salary, professional fees, and other factors. The TDS rate also varies depending on the kind of payment.
  • A refund is issued when the TDS amount paid exceeds the tax due.
  • In the ITR, it is critical to precisely state the details of the tax-saving tools. Section 80C, for example, allows you to deduct the premiums you pay on an insurance policy. 
  • Remember that insurance isn’t the only way to save money on taxes. You should purchase coverage from a reputable insurance company to acquire the greatest protection policies.
  • To get the return in your bank account, the bank details must be supplied correctly. Incorrect information can lead to delays or non-receipt of the refund amount.
  • You could file a revised return if you forgot to claim your refund when filing your original return.

Final Thoughts

Navigating the complexities of legal-financial obligations can be hard. Plus, even minor errors can result in hefty legal penalties and a tarnished reputation, affecting your business. Plus, it can be stressful in the long run. Vakilsearch makes every effort to make it easy for you. Check out our website, see what we offer, and let us know how we can help.


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