TDS Refund: Procedure for applying for Income Tax Refund

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TDS is required to be deducted at the time of making any payment and the TDS so deducted is deposited with the Income Tax Department as tax deducted on behalf of the person to whom the payment is being made.

The TDS so deducted is allowed to be claimed as a credit from the Income Tax Payable of the person whose TDS has been deducted. The Balance amount of tax shall be tax payable/tds refundable. This can be explained with the help of the following example:-

Total Tax Payable by Mr A for the year 2013-14* 50000
(Less) TDS deducted by Mr B while making payment to Mr A -20000
(Less) TDS deducted by Mr C while making payment to Mr A -15000
Balance Tax Payable by Mr A 15000

*The total tax payable would be the self assessment tax computed by the taxpayer himself by applying the income tax slab rates on his total income.

The Balance shall be the tax payable by Mr A which he would be required to pay before the due date of payment of income tax.

However, in case the TDS Deducted is more than the total tax payable, the excess amount deducted is allowed to be claimed as TDS Refund.  This can be explained with the help of the following example

Total Tax Payable by Mr A for the year 2013-14 40000
(Less) TDS deducted by Mr B while making payment to Mr A -25000
(Less) TDS deducted by Mr C while making payment to Mr A -20000
TDS Refundable to Mr. A 5000

In the above case, as the Total TDS Deducted is more than the Total Tax payable for the year, the excess amount deducted shall be the TDS Refund which the income tax dept would be making to Mr. A

Income-Tax-tds-Refund

Procedure for applying for TDS Refund

There is no specific application form for applying for TDS Refund. The taxpayer is only required to file his income tax return and in the income tax return, the taxpayer would be required to show the computation of his income tax payable and the total TDS which has been deducted.

On furnishing these details, the income tax software will automatically show that TDS is refundable to the taxpayer and tds would be refunded to the taxpayer in due course.

After the income tax return has been filed citing that there is a tds refund, it takes a few months for the income tax officer to sanction your income tax refund. However, this tds refund is issued to the taxpayer along with interest @ 6% per annum (Interest would only be paid if the Refund payable is more than 10% of the total tax payable for that year)

At the time of issue of refund, intimation under section 143(1) would also be sent to the taxpayer showing the computation of the interest paid to him.

If the taxpayer is satisfied with the computation of interest, he need not reply to such intimation. However, in case he is not satisfied, he should contact his income tax officer.

Please Note: The taxpayers are requested to note that in case they receive any mail stating that their income tax refund has been approved and ask them for their bank details, the taxpayer should not give their bank details as such mails are scam mails. The refund would automatically be awarded to the taxpayer in the bank account number mentioned at the time of filing income tax return.

TDS Refund Status

The taxpayer can also check online whether his tds refund has been sanctioned by furnishing his PAN No. and the year for which the refund has been sought on the following link:-

https://tin.tin.nsdl.com/oltas/refundstatuslogin.html

The TDS Refund Status can also be tracked by contacting the help desk of SBI on its toll free no i.e. 18004259760 or through email at [email protected]

Important Points regarding TDS Refund

  1. Filing of Income Tax Return is mandatory for getting income tax refund
  2. The sooner you file your income tax returns and submit your ITR-V, the sooner it is expected that the excess tds would be refunded.
  3. The TDS deducted is reflected in Form 16 & Form 16A and the consolidated TDS deducted is reflected in Form 26AS
  4. If the taxpayer is of the belief that in any year, the TDS Deducted would be more than the total tax payable for that year, he can file Form 13 in advance for Nil/Lower Deduction of TDS.

A Personal Finance enthusiast, Karan is the founder of charteredclub.com and loves to discuss about Money related matters.