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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. You know 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 salary TDS deducted due to non-submission of 80C investment proofs or rent receipts towards house rent allowance.
At the time of filing your income tax return, 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.
1. When your employer deducts more than the income tax payable:
2. On TDS refund 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.
In case you haven’t received your refund, here are a few ways to verify this.
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 needn’t pay this interest. Moreover, the interest, if any, received is liable to be taxed under ‘income from other sources’.
The status on TIN website shows that refund had been adjusted against the outstanding demand of the previous year. What does that mean?
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.
If I have paid the excessive tax, will it be refunded?
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.
Do I need to submit any documents for proof while filing my income tax returns?
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.
How to Request for Refund Reissue (in case of refund failure)?
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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