TDS or Tax Deducted at Source is the amount; that the employer or the deductor needs to deduct at the time of making payment; on behalf of the person to whom they make payment. TDS refund arises when there is a mismatch between the total tax deducted at the end of the FY; and the income tax payable for that FY. When an individual pays more than required tax for a particular FY; ITR refund option is available to him.
For example, if total tax payable by A for the year 2016-17 is Rs. 40000. Tax deducted by his employer from his salary is Rs. 50000. Therefore, tax refund available to A is Rs. 10000. Thus, if the deducted TDS is more than the total tax payable; then the payee can claim excess amount deducted as TDS refund.
As per the section 192; an employer shall deduct TDS on the amount payable at the average rate of income tax. The Finance act of each financial year specifies the rates in force for deduction of tax at source.
As per section 203, a person deducting tax at source shall furnish a TDS certificate to the payee to the effect that he has deducted tax; along with certain other particulars. Furthermore, banks shall also issue such certificates at the time of payment of pension. For an employee receiving salary income including pension, the certificate has to be issued in form No. 16. If the employee has lost the original TDS certificate, he can approach the employer for the issue of a duplicate TDS certificate. However, before giving credit of the tax on basis of duplicate certificate; assessing officer needs to get payment certified by the assessing officer concerned; and also needs to obtain an indemnity bond from the assessing employee.
Procedure for applying for TDS refund
As there is no particular application form for applying for TDS refund, an assessee only needs to file his income tax return and to show the computation of his income tax payable and the total TDS deducted.
- An assessee needs to visit https://incometaxindiaefiling.gov.in/ and login/signup to download the relevant form for TDS refund or income tax refund.
- After downloading the ITR Java/Excel Utility, furnish all the details in ITR Java Utility and upload your ITR through the Java utility after validating the details. OR for e-filing without downloading the Java utility; an assessee needs to go to the above website, and after login, he shall to go to e-file-Income Tax return-Prepare and submit Online. However, if he not signs the ITRs digitally; he needs to send the hard-copy of ITR-V acknowledgment form to the income tax department after signing it.
- An acknowledgment details will be displayed after uploading your ITR and ITR-V Form will be sent to your registered email id; which the assessee shall sign and send to the Income Tax Office.
- If the assessee has linked Aadhaar card to ITR form, he need not physically send the ITR form to the Income Tax Office; even if he had not used the Digital Signature in the form.
Note: Address for sending ITR-V Form – “Income Tax Department – CPC, Post Bag No-1, Electronic City Post Office, Bengaluru – 560100, Karnataka”. (Only by ordinary post or speed post within 120 days of transmitting the data electronically)
TDS refund is issued to the taxpayer with 6% interest p.a. calculated from the date of filing of the return, only if the refund payable is more than 10 % of the total tax payable for that year otherwise no interest is payable if it is less than 10%.
For taxpayers, for whom the tax audit is not mandatory; the due date for Income Tax e-filing is 31st July of AY; and for those for whom the tax audit is mandatory; the due date is 30th September. However, the taxpayer may file a belated income tax return along with interest and penalty, in case he fails to file the return before the due date. The taxpayer can also file a revised return of income U/S 139(5), in case he recognizes any error in the ITR, before the expiry of 1 year from the end of the relevant AY or before the completion of AY (Whichever is earlier).
An assessee can check TDS refund status online from the website https://tin.tin.nsdl.com/oltas/refundstatuslogin.html; after furnishing his PAN no. and the year for which the refund has been sought or by contacting the SBI help desk no. 18004259760 or by email at firstname.lastname@example.org.
TDS refund can take 3-6 months to process. You can file a dispute if there is a delay or if you didn’t receive the refund by writing to your income tax officer along with the required details and documents. However if then also you are not satisfied with the response from income tax officer you can contact the income tax ombudsman with the details of your PAN, form no 16, TDS certificate issued by the bank, bank statement, etc.