What is TDS Refund?
TDS refund arises when the income tax amount deducted is higher than the actual tax debt.Many a times it is seen that investment projections declared during the start of a financial year don’t match with the particular investments made at the top of that year.
If there’s a mismatch between the entire tax deducted at the top of a fiscal year and therefore the tax you’re alleged to buy that specific year, a TDS refund arises.
How to claim TDS Refund:
- In case your worker deducts more tax than applicable to you as per your IT return filing As discussed in the example above, a mismatch between tax deducted by employer and the actual tax payable is taken care of once you file your IT return. When you file your tax return, you’re alleged to quote your bank name and IFSC code. This makes it easier for the tax department to return the surplus tax you’ve paid.
For any fiscal year , if you’re sure that the TDS deducted will surely be quite the entire tax payable by you, then under section 197 you’ll file Form 13 beforehand for lower or nil TDS deduction. The response certificate received by tax officer can then be submitted to the authority who is meant to deduct TDS for you.
- If your income is under the tax slab and your bank reduce the tax on your fixed deposit.In case your income does not fall under the income tax bracket and your bank has deducted tax on your fixed deposit interest, you’ll recover the tax amount in two ways.
- First is to declare it in your IT return form and therefore the tax department will automatically compute the refund and credit it to your deposit account.
- Second way is to fill form 15G and submit it in your bank telling them that your salary is below tax slab and hence no tax should be levied thereon.
- If your are a old person with fixed deposit accounts:Senior citizens are exempt from tax write-off on interest earned on fixed deposits. If you’re above 60 years aged and have fixed deposit accounts, you’re required to fill and submit form 15H to make sure that bank doesn’t deduct income tax on the FD interest earned.
Alternatively, you’ll get the refund credited to your deposit account once you file your IT return. The IT department then calculates the tax applicable to you and adjusts the surplus tax paid and credits it back to the deposit account you’ve mentioned in your IT return form.
once you declare your interest income from fixed deposits at the time of maturity, you declare it as a lump-sum amount. This can end in a hefty tax amount payable and also a better tax slab (as your income goes up over a period of time). Hence, it’s prudent to declare interest income yearly instead of at the time of deposit maturity.
TDS Refund Example:
Sandeep works at an MNC in Bangalore. Last year he was late submitting his certificate for LIC premium exemption under section 80C. As a result, his company write off around Rs.10,000 extra as TDS.
Total income tax payable by Sandeep for year 2013-2014 = Rs.30,000
Tax deducted by owner from Sandeep’s salary = Rs.40,000
Tax comepnsate Sandeep is eligible for = Rs.40,000 – Rs.30,000 = Rs.10,000
His total tax acquired last year aware of be Rs.30,000 when actually it should are just Rs.20,000. He ended up paying extra because he couldn’t get his LIC premium receipts on time.
Similarly, Arun couldn’t invest the Rs.40,000 within the timeline set by his employer. He just couldn’t choose whether to urge a long-term fixed deposit or avail a life insurance policy. While he picked his brain about this decision, he missed the deadline for tax proof submissions as set by his employer. Eventually he ended up paying more tax even when he did invest that quantity before the financial year closed.
These are typical situations that are faced by plenty of individuals almost every financial year . the sole because of revisit this extra tax is to file your income tax return . the earlier you file your income tax return , the faster the returns are processed.
TDS Refund Status
You can check the TDS refund status by the successive methods:
- An acknowledgment e-mail sent to your registered e-mail address
- By using the PAN card number on the website – https://incometaxindiaefiling.gov.in/
- By calling CPC Bangalore on 1800-4250-0025(toll-free number) so as to see the status.
TDS refund period
The TDS refund period depends on various factors. If you have filed the ITR details on time, it can take anywhere between three to six months to receive the refund. The refund period also will depend upon completing the e-verification. If you are not receive your refund on time, you’ll ask your employer to verify the style 16, contact your tax Office, or get in-tuned with Ombudsman – Income Tax Department.
Please ask https://incometaxindiaefiling.gov.in for more information associated with ITR or TDS refund.
Interest on TDS Refund
Under Section 200A of the tax Act, if the tax department is late in paying you the tax refund applicable to you, then you’re entitled for a simple interest of 6% p.a. on your refund amount. This interest starts accruing from the first month i.e. April of any financial year. However, interest isn’t paid out if the tax refund is a smaller amount than 10% of the entire tax payable during a year.
The interest earned on tax refund is additionally taxable since it’s considered under ‘˜income from other sources’.
In order to initiate the e-filing process, you’d have to login or register yourself on the tax Department website – https://incometaxindiaefiling.gov.in/. Once you have registered, you can choose to either download the relevant form and upload it back once you have completed or you can also fill the details online. The ITR-1 form is applicable for people earning a salary, pension, or income from property or other sources apart from lottery. The ITR-2 form is applicable for people who are earning capital gains. The ITR-2 is applicable for a situation where there are no capital gains, however, the individual owns more than one house/property. For professionals and business owners, the ITR-3, ITR-4, and ITR-4S can be used.
When you have completed filling up the style, you’ll have to provide folders like PAN, Form 16, TDS certificate, interest statements, and details of investments. Once the documents are submitted, you’ll receive an acknowledgement number. If you’ve got used the digital signature, you will not require taking any more action but if you’ve got submitted the forms without a digital signature, you will receive an email with ITR V that’s essential for completing the verification for ITR. You can either verify the document online or send a physical copy of the ITR V to tax Department together with your signature thereon.
How to Avoid Tax Filing Hassles?
You can avoid a number of tax issues if you’re taking care of some simple points.
- Plan your taxes beforehand in order that you are doing not need to rush into it at the last minute . It is an honest idea to start out planning as soon as a fiscal year begins
- Avoid paying late tax amount charges which are 1% of the tax due
- Manage your tax smartly in order that the TDS deducted is nearly adequate to the tax payable by you. You can avoid refund hassles and delays if you propose your tax this manner
- Know all tax exemptions you’re eligible for and claim them if required
What is Income Tax Refund?
Being subject to tax , we declared our projected investment amount at the start of every fiscal year . However, there are repeatedly that the declared amount wouldn’t match the certain investment amount because of various factors. It might be because of investments that started within the middle of a fiscal year or difference in income due to other factors. In instances where a private has paid more tax than required for a fiscal year , the govt provides an choice to apply for a tax refund.
How to apply for TDS Refund or Tax Return (ITR)?
The process for income tax return is simple, all you need to do is, visit the website – https://incometaxindiaefiling.gov.in/, login or sign-up to download the relevant form for refund of income tax, enter all the particulars within the form, and submit it. The ITR forms are available for various categories, you’d got to choose the style that’s applicable for your income category.
How does ITR work?
If the scale of your income is not applicable for income tax and your employer had deducted a certain amount of money as tax, you can recover that amount by filing the ITR form. The ITR is additionally applicable for a situation where you’ve got paid quite the specified tax amount. Based on the small print provided you, the tax Department will calculate and review the taxable amount. If you’re eligible for a refund, you’ll receive the surplus amount in your deposit account directly or as a cheque in your name.
You will be eligible for a 6% interest on your ITR amount if the refundable amount is over 10% of the entire taxable amount.
The procedure for raising a trouble about delay in receiving ITR
Even after applying for ITR, if you haven’t received your refund or there’s a delay in receiving the refundable amount, you’ll get in-tuned together with your tax Officer to file a dispute. You will got to contact your tax Officer in writing with all the required details and documents. If you do not receive a satisfactory response or any response for that matter, you can contact the Income Tax Ombudsman with the following details –
- Your PAN number
- Form 16
- Bank statement
- TDS certificate issued by your bank, and
- All the documents that show the investments and earnings
FAQs about TDS Refund
- Will i buy a TDS refund even though I had not provided my deposit account details within the TDS Certificate or tax Return?
A) Your correct deposit account details should be provided in your TDS Certificate or ITR to permit the tax Department to transfer the refund amount through NEFT transfer to your account. Any mistake within the deposit account could lead on to either transfer of the quantity to somebody else or delay and non-transfer. If you’ve got not provided a deposit account number, you want to make sure that a minimum of the address you’ve got mentioned within the ITR/linked to PAN is right, because the income tax department might send you a cheque of the refund amount.
- How do i modify my address in order that i do not miss the refund cheque?
A) You can log in to the Income Tax E-Filing portal and raise a Refund Re-issue Request. But this can be done only if you did not receive the refund cheque and it was returned to the Income Tax Department. If somebody else has collected it in your name, then the taxman will not be liable for the quantity . The Refund Re-issue Request are often found in the ‘˜My Account’ option on the e-filing portal. You can choose your mode of payment receipt ‘“ Electronic Clearance Service (ECS) or bond. You can change both the address and deposit account number through this feature . This information are going to be updated for all income tax-related documents.
- Is there an option to change contact details from what I provided in the ITR?
A) Yes. On the tax e-filing portal, on the ‘˜Profile Settings’, you’ll find ‘˜Update Contact Details’. You can change your address, email id, and mobile number through this option.
- What are the various quite refund statuses that i’ll see in my e-filing portal profile?
A) The Income Tax e-filing portal has 11 status options for your refund amount. They are:
- No e-Filing has been done for this assessment year: If ITR was filed physically and not online, then the status will not be displayed in your profile on the website. This might also mean that haven’t filed your ITR at all.
- Not determined: The IT Department is yet to process your return and a refund amount has not been confirmed.
- Refund paid: The refund has been dispatched. If you haven’t received it, check with your bank and your nearest post office. Also check your address and bank account number on the e-filing profile to confirm that there is no mistake.
- No demand no refund: The tax write-off was perfect and therefore the I-T department owes you nothing. If you had claimed refund and this status shows up, it means the taxman’s calculations were different from yours and therefore the department doesn’t think it owes you anything. If there are any errors in your ITR, you can either rectify or revise it online.
- ITR processed, refund determined and sent bent Refund Banker: The refund is being processed, so just wait a touch more.
- Refund unpaid: Either your deposit account number or your address is wrong and therefore the department couldn’t deliver the refund to you.
- Contact jurisdictional Assessing Officer: The department needs clarification or more information on your tax return and you want to get in-tuned together with your jurisdictional AO for more details.
- Demand determined: Your refund request has been rejected and you’ve got been found to owe the department extra money as tax. If they’re right, you would like to follow the procedure suggested by the taxman and pay the dues before deadline. But if you made any mistake in the ITR, you can either rectify or revise it with the correct details.
- Rectification processed refund determined and sent bent Refund Banker: If you had filed an ITR rectification request it’s been accepted and processed.
- Rectification processed demand determined: If you had filed a rectification, it’s been accepted but the department still thinks you owe them some extra money in taxes. You will got to pay the quantity within 30 days of receiving a notice on this.
- Rectification processed no demand no refund: If you had filed a rectification, it’s been accepted but the department estimates that there’s no tax dues or refunds in your case.