Claiming your TDS refund is easy peasy. Here’s how you can do it and enjoy that little extra cash.
Everyone loves finding money in their pockets when they least expect it and need it the most. Likewise, getting a TDS (Tax Deducted at Source) refund is serendipitous! However, you need to know how to claim your TDS refund and enjoy that extra cash that you weren’t expecting.
During the tax filing season you may have invariably come across the term very often. While most people have TDS deducted from their income, not everyone claims their refund. In this article we will educate you about TDS and how you can claim a refund.
What is TDS?
TDS, or Tax Deducted at Source, is tax which is deducted from the income at the time of earning the income. The entity which makes the payment to the individual deducts tax as per the applicable rate and makes the remaining payment to the individual. The tax payer is supposed to remit the amount deducted to the Government immediately or on a quarterly basis.
Additional Reading: Introduction To TDS – How It Impacts Your Money
Who can deduct TDS?
The term TDS is most commonly used in case of an employer – employee relationship. The employer, while paying salary to the employee on a monthly basis, deducts TDS based on the income tax rate applicable to the employee. The TDS on all payments needs to be deducted at specified rates, unless otherwise exempted.
Payment of interest on investments, payments to contractors, fees for professional or technical services, payment of rent, payment of compensation on acquisition of immovable property, etc., are some other cases where tax is deducted at source. The remaining amount is remitted to the individual.
Additional Reading: Understanding TDS
What are Form 16 and Form 16A?
When TDS is deducted, the entity deducting the tax issues a certificate indicating the amount of tax deducted and remitted to the Government. Form 16 is issued by the employer to the employee and this has details on the income earned by the employee, the tax deducted by the employer and the details of tax remitted by the employer.
Form 16A on the other hand is issued by other entities who deduct TDS on all payments other than salary. This also signifies the amount of payment made, amount of tax deducted and the TDS payment made to the Government. Form 16A is issued on a quarterly basis, unlike Form 16 which is issued on an annual basis.
When can you claim a TDS refund?
When the amount you are supposed to pay as tax in a year is lower than the amount already deducted as TDS, you are eligible to claim a TDS refund.
For example, Raj is an independent contractor. Let us assume the total tax to be paid by Raj in the previous year, based on all his earnings, is Rs. 40,000. A total of Rs. 50,000 was deducted as TDS by all his contractees on Raj’s account and remitted to the Government. In this case, Raj can claim Rs. 10,000 as TDS refund.
Another instance when you can claim a TDS refund is when you fall below the minimum taxable limit and yet TDS has been deducted. For example, Sheela offered consulting services to her clients and Rs. 20,000 was deducted at source by the clients. However, Sheela’s total income for the year was only Rs. 1.5 lakhs. In this case, she can claim TDS refund of Rs. 20,000.
Additional Reading: TDS Refund – As Easy as Pie
How to claim TDS refund
There is no specific refund process or form to claim TDS refunds. You must file your income tax returns in the normal manner. The excess tax that was deducted will be the refund amount due, and this needs to be shown in the returns filed. The TDS refund is processed by the Income Tax department within a few months of filing returns. Usually, it takes about 6 months’ time.
The Income Tax department processes the refund amount along with an interest of 6% per annum in some cases. The refund is usually given in the form of a cheque. However, with effect from Assessment Year 2015-16, all refunds are made in electronic form, directly to the bank account of the tax payer, which is required to be mentioned while filing the returns.
Additional Reading: Claim Income Tax Refund: A Step by Step Guide
What to do if you don’t receive your TDS refund?
The TDS refund is usually automatically processed and credited, if everything is in order. However, if you don’t get your refund despite filing for it, you must first check the status of the refund, which is possible by mentioning your PAN number and the assessment year in the e-filing website of the Income Tax department.
A delay in refund is possible if you have physically filed the returns or if you have e-filed the returns but not sent the ITR-V on time. In this case, you will need to wait.
Sometimes, the address or the bank account mentioned is incorrect. In this case, you should contact your Assessing Officer and inform them of the change. The Assessing Officer will in turn inform the concerned bank regarding the remittance, and you can track it accordingly.
In some cases, the IT department finds an error in your calculations and may find that you are not eligible for the refund. In this case, you can contact the Assessing Officer and get the required clarification.
In all the above cases, it is important to first ascertain the cause of not getting the refund before taking the appropriate steps.
Now that you know how to claim a TDS refund, why not use that extra cash wisely by investing it in Mutual Funds?
thank you sir for such total information regarding TDS refund such a wonderful information.
Sir one thing I want to know how to file TDS 24Q manually with example or screenshots please help me regarding this.
Thanks for your valuable feedback. Look out for more updates on our blog!
Thanx sir, for your valuable information. But i have a doubt sir. i have applied for my tax refund for the year 2016-17. I checked my refund status .It is shown my amount has credited in my account.. , I contacted my bank .they say it is not credited in my bank According to you,I contacted my assessing officer through phone because now we stay in M.P. but my assessment done in Kerala ,even my bank account also in kerala. My assessing officer is not ready to help me through phone. He is asking me to go there for further process.I can reach in kerala only in December 2017. if I reach in December will i get my amount? pLEASE GIVE ME YOUR REPLY THROUGH MY MAIL.ID.
Hi LATHIKANAIR, We suggest that you go in person to get your TDS processed. It doesn’t matter when you go as long as you have filed your return for that year and have the acknowledgment for the same.
How to claim refund TDS deducted from bank deposit (FD).
Hi Pankaj, There is no specific refund process or form to claim TDS refunds. File your income tax returns in the normal manner. The excess tax that was deducted will be the refund amount due. And this TDS refund will be processed by the Income Tax department within a few months of filing returns. Cheers, Team BankBazaar.
Sir,I had worked in international organisation as a Project assistant for 3 months.My salary was 30000/-(no allowances).TDS @10%.Can I refund tds.Please tell me the process.
Hi Srikanth, There is no specific refund process or form to claim TDS refunds. File your income tax returns in the normal manner. The excess tax that was deducted will be the refund amount due. And this TDS refund will be processed by the Income Tax department within a few months of filing returns. Cheers, Team BankBazaar
If I fill the 15G form in my bank branch then they can deduct my amount from my FDR?i AM NOT GOVT SERVANT AND MY FAMILY INCOME YEARLY IS 1.5 LAKH.
Hi Kanchan, If you are not in the taxable bracket, you can file form 15G/H to avoid TDS. If you have submitted this form the bank will not deduct TDS. Cheers, Team BankBazaar
sir i my tds deducted on fd but i am in not tax bracket and now i dont want the tds refund as tax deduct is only 350 rupees so i want to ask whether i have to fill return is it mandatory as i dont want the refund what if i dont fill return do i get notice for that
Even if the amount is small, it is advisable to file your returns even if you don’t need TDS refund. This will help you in other matters such as getting loans because most banks require your ITR for providing loans.
I have received Income Tax refund for the Asstt. Year 2017-18 but less amount received due to A firm TDS return file after my Asstt. of Income Tax Return
Kindly give me proper reply that can I received Balance Amount of Income Tax Refund
Please write to the income tax department or talk to your assessment officer for the details.
I want to get my TDS amount which was deducted in my previous organization. Should i need to visit previous organization for this. Please provide the solution how i can get my TDS.
Hi Rashmi, Get your Form 16 from your previous organisation. It will give you details about the taxes that were deducted during your tenure there. In case you want to claim TDS returns, you can fill the ITR form. Cheers, Team BankBazaar
MY BANK WAS DEDUCTED RS. 9,272 FROM MY INTEREST ON FD & THE REASON THEY MENTIONED I DIDN’T SUBMIT THE FORM 15G/H. THEY ARE ASKING ME TO SUBMIT IT RETURN. SO FAR I DIDN’T MADE ANY IT RETURNS & TOTAL INVESTMENT IS AROUND. 20LAKHS UNDER MY & MY WIFE’S PAN. IF THERE ANY CHANCE TO GET BACK THE TDS.
Hi Premarajan, The only way to get your TDS refunded is to file your income tax return. Please consult a chartered accountant for help. Cheers, Team BankBazaar
My name is Kishan Badhwar. I’ve joined a company at the salary of 29000 in hand but they will deduct 10% of TDS from the salary which means 2900 per month. So after 1 year total TDS deduction will be 2900*12=34800. So how I will get refund of that amount and and how much amount I will get. Please clarify me.
The TDS refund process has been explained well in this article. Please give it a read and let us know if you still have any doubts.
I HAVE FORM 16 A BUT I DONT KNOW WHICH ITR I FILE. PLZ TELL ME.
NATURE OF PAYMENT 194J
Usually freelancers use ITR 4S. We suggest you check the income tax website for more information.
In the FY 16-17, My previous organization gives me fixed amount for completion of project. But on the same year, Company deduct the TDS whatever is applicable as per slab bracket. When I switch over the other organization, previous company recover the 2/3 amount against it was paid.
Now please tell me, can I claim the TDS amount, whatever deducted on recovered amount?
If you have paid excess TDS, it will be refunded automatically when you file your Income Tax Returns (ITR). Please check the Form 26AS for TDS details.