When and How to claim TDS Refund

In case of excess deduction of tax at source, claim of refund of such excess TDS can be made by the deductor. The excess amount is refundable as per procedure laid down for refund of TDS.

The difference between the actual payment made by the deductor and the tax deducted at source or deductible, whichever is more will be treated as the excess payment made. This amount is to be first adjusted against any existing tax liability under any of the Direct Tax Acts. After meeting such liability, the balance amount is to be refunded.

When TDS refund can be claimed:

  1. 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.
  2. When you fall below the minimum taxable limit and yet TDS has been deducted.

How TDS refund can be claimed:

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 of TDS over what you are supposed to pay as tax in the year 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 AY 2015-16, all refunds will be made in electronic form, directly to the bank account of the assessee, which is required to be mentioned while filing the returns.

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