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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.
A TDS Refund arises when the taxes paid by way of TDS are greater than the actual tax payable calculated for the Financial Year. It is calculated after consolidating income earned from various sources.
We all, as taxpayers, are categorized under various tax slabs. Say, you have an FD and earn an interest income out of it. Banks levy a basic 10% TDS on the interest accumulated. Now, if you belong to the 5% tax bracket, you can claim a TDS refund for the additional amount deducted.
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.
At the time of filing ITR, you would sum up all your income from various sources, find out the tax liability, and subtract the TDS applied to your income. If the TDS is higher than your total tax liability for the financial year, it means a refund is due from the government.
When the tax deducted does not match your actual tax payable, you can calculate your taxable income and taxes, file an income tax return (ITR) and claim a refund.
During the ITR filing process, you will be prompted to provide your bank name and IFSC code. This makes it easier for the IT department to refund you the excess tax paid.
1. When your employer deducts more than the income tax payable:
2. TDS deducted on fixed deposit:
3. For senior citizens with FD accounts:
You can check the status of your TDS refund:
Usually, if you have filed your ITR on time, it takes approximately 3 to 6 months for the refund to be credited in your bank account. The time it takes for the refund to be credited also depends on the completion of the e-verification. Now a days, after completion of ITR processing, refund is issued within a months time.
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’.
Step 4: If the ITR is processed with refund due, click on the ‘refund status’ link. The screen will show complete details of your ITR filing, i.e. from the date of ITR filed, ITR e-verification, ITR processed to the date of issuing a refund.
II. You can also verify the income tax refund status through NSDL website.
Step 1: Got to tin-NSDL website and go to ‘Services’ tab and select option ‘Status of Tax Refunds’.
Step 2: Enter PAN, relevant assessment year, captcha and submit to know the refund status.
III. Other ways to verify your TDS refund is:-
If the IT department is late in paying you the TDS refund as applicable, then they must pay you the amount with a simple interest of 6%. This provision comes under Section 244A of the Income Tax Act. This interest accrues from the first month of the Assessment year when an ITR is filed with the due date and from the date of filing of the returns in any other case.
Do note that if the TDS refund amount is less than 10% of the income tax payable, the IT Department will not pay this interest. Moreover, the interest, if any, received is liable to be taxed under ‘income from other sources’.
You can claim income tax refund for only tax amount that is deposited to the income tax department. Unless the tax amount deducted is deposited to the government, you cannot claim the refund of the same. Unless your employer deposits the balance TDS amount, you cannot claim the refund for the same.
It means income tax refund for the current year had been adjusted against outstanding demand of the previous Assessment year either in part or in full. Contact Ward Assessing Officer/CPC Bangalore for details of the outstanding demand. In e-filed returns, you can inquire by logging into the e-filing portal.
Yes, if you have paid the excessive tax, it will be refunded. To get your additional tax refund, you will have to first file ITR, following which your return will be processed. If you pay any excessive tax, the government will refund it back to your bank account via ECS. However, ensure that your bank account is prevalidated.
You shall not provide any proof or documents while filing your ITR. However, you will have to provide the details of your Aadhaar in order to file your income tax returns successfully.
In case of refund failure, you can raise the service request in the e-filing portal upon receiving communication from CPC. To raise the request:
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