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.
- Recommended Read: Rate of TDS to be deducted while making payments
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
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.
- Recommended Read: Procedure for e-filing Income Tax Return online
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.
- Recommended Read: Income Tax Software for filing Income Tax Return
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. This Interest would be calculated from the date of filing of return.
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.
- Recommended Read: What is Intimation under Section 143(1)
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.
- Recommended Read: How to locate your 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.
- Recommended Read: Beware of Fraud Mails regarding Income Tax Refunds
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:-
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]
- Recommended Read: Top 5 reasons for delay in TDS Refund
Important Points regarding TDS Refund
- Filing of Income Tax Return is mandatory for getting income tax refund
- 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.
- The TDS deducted is reflected in Form 16 & Form 16A and the consolidated TDS deducted is reflected in Form 26AS
- 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.
- In case the refund is granted after an order passed in an appeal, the interest would be paid from the date on which the tax is paid to the date on which the refund is granted.