How to claim TDS refund

Got a fixed deposit? Tax Deducted at Source (TDS) is applicable. TDS is deducted from your salary. Sold a house? TDS has to be paid. Almost all payments you receive now have a TDS applicable on it. We are sure you aren’t very happy that TDS is getting deducted. However, here’s some good news. If excess TDS was deducted, you could get a refund. But before that, you need to understand what TDS is.

What is the TDS?

TDS is part of the tax applicable on an income and is deducted as soon as the income is earned. Who deducts it? Usually, the one who makes the payment of such income will deduct the TDS that is applicable. The one who deducts TDS will pay the money to the government either immediately or on a quarterly basis (if it is a regular income). This is what happens when TDS is deducted from your salary.

Who deducts the TDS?

If you are an employee, your employer will deduct TDS from your income based on your income and the tax declarations that you might have made. An employer usually deducts TDS on a monthly basis. There are other incomes where TDS is applicable. This will include payment of interest on investments like fixed deposits, payments made to contractors or consultants, payment made to freelancers, payments made to professionals or for technical service and also in case of property transfers. In the case of real estate transactions, the buyer deducts TDS on the payment given to the seller.

The TDS certificates

You can get a TDS certificate when TDS is deducted. The one who deducts TDS will provide a certificate for the TDS deducted. Does an employer issue such a certificate? No. But you can get these details from the Form 16 given to you by your employer. Form 16 will have all the details regarding the income earned for a particular financial year, the tax deducted for that year and the tax paid to the government by your employer.

Don’t have a regular job? Or made income through other means? You might not get Form 16. You might be provided with Form 16A. This is the form issued to those who have income other than salary. What does Form 16A have? It has the amount of income paid out, the tax deducted and the tax paid to the government. Unlike Form 16 which is issued every year, Form 16A is usually provided on a quarterly basis.

The TDS refund

When can you get a TDS refund? When the total tax that needs to be paid by you is lower than the TDS deducted, you can claim a TDS refund. For example, suppose the total tax applicable for the year is Rs 60,000 but Rs 80,000 was deducted as TDS, you can claim the Rs 20,000 as TDS refund.

Is TDS refund applicable in any other case? Yes. This is when you come under the minimum tax slab. Here, TDS should not be applicable because tax itself is not applicable.

Claiming the TDS refund

The best part is that there is no elaborate process for getting back that excess TDS deducted. You just need to file your income tax return for the year and the excess TDS will be refunded by the government. The Indian income tax department processes TDS refunds within six months of the returns being filed. Usually, you are given interest for the TDS refund amount at 6% if the process gets delayed. Earlier, refunds were issued by cheque. Now, refunds are directly credited to the taxpayer’s bank account by the income tax department. This is the reason why you give your bank account details when you file your income tax return.

Haven’t got the TDS refund?

What if you don’t get the refund for many months? You can check the status of your refund online using this link – https://tin.tin.nsdl.com/oltas/refundstatuslogin.html. You just need to enter your PAN number and the assessment year to get your refund details. If you don’t e-file your returns, your refunds could get delayed. Delays could also be due to incorrect bank account details.

If you can’t get the details, contact the assessing officer for your city. They can help you get the details as well as the refund. So the next time excess TDS is deducted, don’t worry, you can claim the refund.