All Indian Citizens earning more than a specific income must pay taxes according to current slab rates under Indian Tax Regulations. However, the employer conceals TDS (Tax Deducted at Source) before the payment is delivered to your account. As a result, when you file your ITR (Income Tax Refund) for the financial year, you may request a TDS return. Although, it’s not easy for everyone to understand the TDS terms and conditions easily, especially if you are a new member paying taxes. Tax deducted at source is the amount reduced from a person’s income, like salary, bank accounts interests, rent, etc. If the collected TDS is more than what you incur to the government, then you can file for a refund TDS process. However, to file for a refund, you must go through a specific process that the government mentions. So let’s discuss everything about Tax Deducted at Source and a complete guide to how you can claim its refund from the government.
Some people need help understanding the difference between TDS vs. income tax and consider both terms quite similar. However, both of them are different. The primary difference is that income tax is filed based on yearly income, while the TDS is deducted at the source for the specific year. The government can file the income tax, while TDS is an indirect method to assist a person with their tax liabilities filed with the government. TDS applies to incomes like interests, commissions, dividends, and salaries. In contrast, income tax implication can be from the earnings from the sources, including bonuses and claims, product sales, salaries, and wages.
What Is TDS Return?
A Tax Deducted at Source refund will be provided to the person whose financial disclosure from the beginning of the year was less than the evidence of investment they offered at the end of the year. However, it is calculated after collecting income earned from various sources. In short, a TDS refund arises when the taxes paid by TDS are more significant than the actual Tax payable calculated for that financial year.
A situation for refund will occur if the investments announced at the beginning of the year are lower than the actual investments made at the end of the year. You can receive the TDS refund as fast as you file your income tax return as soon as possible.
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What Is A TDS Certificate?
There are different types of TDS certificates Form 16, Form 16A, Form 16B, and Form 16C. These TDS certificates must be issued by a person deducting TDS from the assessee whose income TDS was deducted while making payment.
How To Claim TDS Return?
When the Tax deducted does not match the actual Tax payable, you can calculate your taxable income and file an Income Tax Return, to claim a refund. During the ITR filing, you will be provided your bank name and IFSC code, making it easier for the IT department to refund you the excess Tax paid.
When the employer deducts more than the income tax payable-
- Suppose your taxable income is below the basic exemption limit. In that case, you can avoid a TDS rebate from your salary by applying for a NIL TDS certificate from the jurisdiction income tax officer as per section 197.
- You can fill Nil deduction order passed under section 197 to the TDS deductor.
TDS deducted on fixed deposits-
- When your taxable income is less than the basic exemption limit, you must submit a declaration in form 15G to your bank to specify to them that you do not have a taxable income. Hence, no tax would be deducted from your interest income.
- If the bank reduces Tax on your interest income even after submitting the form 15G declaration, you can request the refund by filing your ITR.
For senior citizens with Fixed Deposit accounts-
- Senior citizens aged 60 or above are free from tax deductions on interest earned from bank deposits. However, the exemption is applicable if the interest on deposits from every bank is up to RS. 50,000 every year.
- If your interest income exceeds the above limit and your total income is below the exemption limit, you can submit Form 15H to your bank to notify them that you do not have a taxable gain.
- If the bank deducts Tax on your interest income, you can claim a refund by filing your ITR.
How to claim a TDS refund online?
If you wonder how to file TDS online, then follow the below process-
- To file your TDS online, you must first register on the IT department’s website.
- After registration, you can file your income tax return by downloading the ITR form.
- Fill in the required details, upload the form and click on submit button.
- After filing the ITR, an acknowledgment is generated for the ITR submitted, which you must verify. However, this verification is e-verification, and you can do this by using a digital signature, an OTP based on your Aadhar Card, or through your net-banking account.
- Although, if you cannot e-verify the ITR, you can still complete the verification process by sending a signed physical copy to the IT department.
How To Check TDS Refund Status?
You can check your TDS refund claim status with the help of the below ways-
- Acknowledgment and refund processing email from the IT department.
- With the use of a PAN card number, check the link https://incometaxindiafiling.gov.in/.
What Is The TDS Refund Period?
If you have filed an ITR on time, it will usually take around 3 to 6 months to be credited to your bank account. However, the time it takes for the refund process also depends on completing the e-verification. After completing ITR processing, a refund is issued within a month.
How To Verify the TDS Refund Status?
Sometimes it happens with many people that even after filing for the refund, they are unable to get the rebate, so in such a situation, you can verify the status by logging in to your e-filing account and following the below steps-
Step 1: Login to your e-filing account.
Step 2: Go to e-file, click on Income Tax Returns and click on View Filed Returns.
Step 3: Now, put the financial year you want to verify the refund status and click on the ‘view details.’ option.
Step 4: If the ITR is treated with a refund due, click on the ‘refund status’ link. The screen will display complete details of your ITR filing, including ITR, filed to date, ITR e-verification, and ITR processed to the date of issuing a refund.
You can check the tax refund status with NSDL (National Securities Depository Limited) website.
Step 1: Go to the tin-NSDL website, go to the ‘services’ tab, and select option ‘status of a tax refund.’
Step 2: Enter PAN and relevant assessment year, and submit to know the refund status.
Other ways to verify the TDS refund are-
- Download and verify Form 26AS (Annual TDS summary statement) with your TDS and income details.
- Contact your jurisdictional income tax officer.
- Or file a complaint through your e-filing account.
Interest in TDS Refund:
Sometimes, when the IT department gets late, they must pay the amount with a simple interest of 6 percent. Moreover, this interest collects from the first month of the financial year when the ITR is filed with the due date and from the date of filing the returns in any other case. This provision falls under section 244A of the Income Tax Act.
In addition, you must note that if the TDS refund amount is less than 10 percent of the Tax payable, then the IT department can refuse to pay this interest.
Final Thoughts:
In this blog, we’ve provided a comprehensive guide on Tax Deducted at Source (TDS) and how to file a TDS return. We’ve also clarified the difference between TDS and income tax, as these terms are often mistakenly considered the same. We hope you find this article helpful. If you need further assistance, 56pay offers a range of financial services and expert consultation. Feel free to contact us, and our representatives will be happy to assist you