The complete guide about the refund of TDS is as follows. Know how to claim the TDS (Tax Deduction at Status) Refund. Read the complete article to know the instructions before checking TDS Refund Status Online.
TDS (Tax Deducted at Source) is the tax amount that is deducted from salary by the deductor or employer. In short, persons who are making payments are required to deduct tax at source at prescribed rates. Instead of receiving tax from you on your income at a later date, the Indian government wants the payers to deduct tax and deposit it with the government beforehand.
What is TDS Refund?
If there is an excess deduction of tax at source, deductor can make a claim for refund of such excess TDS. The excess amount is refundable as per procedure laid down for TDS Refund. The difference between the tax deducted at source or deductible and the actual payment made by the deductor, whichever is more will be treated as the excess payment made. Under any of the Direct Tax Acts, this excess amount will be first adjusted against any existing tax liability. After meeting such tax liability, the remaining/balance amount will be refunded.
There are two cases when you can claim for refund of TDS.
Case 1: If the amount you are supposed to pay as tax in a year is less than the amount that is already deducted as TDS, then you are eligible to claim a TDS refund.
Mr. Mahesh is an independent contractor. Let us assume the total tax to be paid by Mr. Mahesh in the previous year, based on all his earnings, is Rs. 40,000. A total of Rs. 50,000 was deducted as TDS by all his contractees on Mahesh’s account and remitted to the Govt. In this case, Mahesh can claim Rs. 10,000 as TDS refund.
Case 2: If you fall below the minimum taxable limit and yet TDS has been deducted, then you can claim a TDS refund.
Mr. Jackson offered consulting services to his clients and Rs. 30,000 was deducted at source by the clients. However, Jackson’s total income for the year was only Rs. 1.5 lakhs. In this case, he can claim TDS refund of Rs. 30,000.
How to Claim TDS Refund?
The Procedure for applying for TDS Refund is as follows.
- There is no specific application form to claim for refund of TDS.
- During the income tax return, the taxpayer/assessee would be required to show the computation/calculation of his income tax payable and the total TDS (Tax Deducted at Source) which has been deducted.
- After giving these details, if you are eligible to claim the refund, the income tax software will automatically show that TDS is refundable to the taxpayer and it would be refunded to the assessee in due course.
- On filing the income tax return quoting that there is a TDS refund, it takes a few months for the income tax officer for the sanction of your Income tax refund.
- This TDS refund is issued to the taxpayer along with interest at the rate of 6% per annum. Interest would only be paid if the Refund of TDS payable is more than 10% of the total tax payable for that year.
- Under section 143(1), at the time of issue of refund, intimation would also be sent to the assessee showing the computation of the interest paid to him.
- On satisfaction with the computation of interest, the taxpayer need not reply to such intimation. If he is not satisfied, he should contact his IT officer.
You are requested to note that in case you receive any mail declaring that their Income Tax refund has been approved and ask you for their bank details, you should not give their bank details because such E-mails are scam E-mails. The refund would automatically be awarded to the assessee in the bank account number mentioned at the time of income tax return filing.
TDS Refund Status Online
The taxpayer can check the refund status through online to know whether his TDS refund has been sanctioned or not. Instead of going to the department to know the status you can easily make the online TDS refund status. The direct link to check the status is provided below.
- Visit the official website i.e., tin.tin.nsdl.com. or Click Here
- Read the instructions carefully.
- Enter the Permanent Account Number (PAN) number and select the Assessment Year as shown in below figure.
- Click on submit and check the TDS Refund Status.
You can also check the Refund Status by contacting the help desk of SBI on its toll-free number i.e., 18004259760 or through E-mail at [email protected]