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How to claim TDS Refund

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July 7, 2022

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7 mins read

How to claim TDS Refund –

Serial No. Contents
1. What is TDS Refund?
2. How to claim TDS Refund?
3. How to claim TDS Refund Online?
4 How to claim TDS Refund for Previous Years?

What is TDS Refund?

Under various, provisions of the Income Tax Act, 1961 {hereinafter referred to as the “Act”}, tax is deducted at source, whereby, a  certain percentage of amount payable (could be in the nature of interest, professional fees, contractor), needs to be deducted as tax before the payer makes the payment. The payor then needs to  deposit  this amount with the Government. In cases, where the total amount deducted by all the payers for a particular taxpayer, and deposited with the Government , is more than the actual tax liability of the taxpayer for a particular Financial Year, the Act has made provisions for one to claim a TDS Refund. Let’s take a closer look at the provisions and understand how to claim TDS Returns.

How to claim TDS Refund?

One can claim a TDS Refund when the actual tax liability is lower, than the amount of TDS deducted and deposited by the payer of income for a particular taxpayer. A TDS Refund can be claimed ,  by a person, by  filing   the ITR by the taxpayer, and once the tax office is satisfied that the return has been made correctly, the refund shall be given back  to the taxpayer.

In order to claim TDS refund,  one is required to provide their bank name and IFSC code, at the time of filing the ITR, so that  the  refund,  can be credited to such account.

Generally, once   the ITR is filed within the prescribed timelines,  a TDS Refund is processed within a period upto 6 months, provided the taxpayer does not have any pending tax demands, or litigation, in which case, the tax Department can adjust the TDS refund with such demand.

How to claim TDS Refund Online by filing the Income Tax return ?

A person can file the ITR by following the undermentioned steps : –  :

  1. Register on  Income Tax Department’s web portal, i.e. https://incometaxindiaefiling.gov.in/.
  2. Downloading the applicable ITR form and after completing the same, upload on https://incometaxindiaefiling.gov.in/.
  3. E-verify the  ITR,  through a digital signature or an Aadhar- based OTP or via one’s net banking account.

How to claim TDS Refund for Previous Years?

If the taxpayer hasn’t filed his ITR within the specified deadlines, then a Belated Income Tax return has to be filed under Section 139{4} until the end of the Assessment Year. Section 119{2}{b} of the Act has given power to the Central Board of Direct Taxes to authorise any Income-Tax Authority, not being a Commissioner {Appeals}, to admit an application or claim any refund or any other relief under this Act.

Authorities that admit applications –

  • Upto Rs. 10,00,000: Principal Commissioners
  • 10,00,000 – Rs.50,00,000: Principal Chief Commissioner
  • 50,00,000 and up: The Board

No condonation application for claim of refund shall be entertained beyond six years from the end of the Assessment Year for which such application has been made. The application shall be disposed off with a period of six months from the end of the month in which such claim has been filed.

Points to Note

  • At the time of claiming such refund for previous years, it must be ensured by the applicant that such claim is correct and genuine.
  • The authority which is assessing the application i.e. either the Principal Commissioner or Principal Chief Commissioner of Income Tax or the board, shall have the power to scrutinize and make necessary inquiries as to the veracity of the claim for refund.

Interest  for delayed payment of  TDS Refund

Under Section 244A of the Income Tax Act, an assessee is entitled to interest @ 6% per annum (no interest shall be payable if refund is less than 10% of the tax determined on summary assessment or regular assessment)  from April 1 of the Assessment Year, until the date on which the refund is granted, where the refund has been filed before the due date.

Such interest is also considered as income of taxpayer and liable to tax in their hands .

Arinjay Jain

Bio of author

Arinjay is a Chartered Accountant with more than 20 years of post-qualification experience. He worked as Director, in the M&A Tax Division at KPMG in India. Presently, he is advising several MNCs in UAE on Economic Substance Regulations and impact of the UAE Corporate Tax Law on their business and clients across globe on International Tax issues . He is a well recognised Trainer of International Tax and UAE Corporate Tax. The areas of service include the following : - Advise and Compliance relating to International Tax Issues; Advise relating to UAE Corporate Tax Issues; Advise and Compliance relating to UAE Economic Substance Regulations; Advise and Compliance relating to Indian Income Tax Issues; Other connected matters from a Regulatory perspective.

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