What Is the Time Period for TDS Refund?

TDS sums up a method of tax collection enforced by the Income Tax Department since 1961. It has to be paid after completing a deduction of all prescribed taxes. The Central Council of Direct Taxes manages the TDS taxation system. It is a subcategory of the Indian Revenue Services. Each taxpayer must file quarterly statements to the Central Board of Direct Taxation or CBDT.

What Is a TDS Refund?

Suppose the financial statements issued at the start of the year are for some reason greater or less than the investment receipts shown at the end of the financial year. At this moment, a lump sum of taxation or TDS refund comes into force. Suppose any discrepancy is detected between the total deducted taxes at a particular fiscal year’s end and the net tax credibility of the IT department for the same financial year. In that case, there arises a necessity to file a TDS refund.

Let us understand the concept of TDS refund with a couple of examples.

Example 1: Rahul is employed currently in an IT firm in Bangalore, for some reason, Rahul was late in presenting the legal papers for a premium that has to be discharged under Section 80C. As a result, Rs. 10,000 additional TDS was levied.

Net TDS amount paid by Rahul = Rs. 50,000 (calculated for one fiscal year)

Additional tax withdrawn = Rs. 60,000.

Therefore, Rahul’s tax refund becomes Rs. 10,000.

Example 2: Saroj could not invest Rs.20,000 as specified by his employer. Saroj got confused about whether he should put the money in a Life Insurance scheme or long-term fixed deposit savings. As he crossed the deadline, the manager asked for his Income-tax proof. This ultimately resulted in Saroj furnishing more TDS amounts even though he had already completed his investments for that particular year.

It is a typical scenario encountered by all the salaried professionals each year, therefore inviting the TDS refund process into force. The sooner someone files their IT return, the quicker they get their TDS refunded.

TDS Refund for Various Payments

In this blog section, you’ll learn about the different scenarios where an individual is eligible to claim a TDS refund.

• TDS refund on wages/salaries when the hirer deducts additional TDS: When excess tax amount is deducted from your salary, follow a few basic procedures to get a refund. First, you have to file ITR. Before proceeding with the whole process, be sure that you are entitled to a refund, i.e., more tax amount has been removed from the salary compared to the payable value. While filing ITR, you will be requested to upload the bank’s name, user account number and IFSC code to facilitate the Income-tax Division to credit the surplus amount to your bank account.

Those with an insufficient income can opt for a NIL TDS certificate by applying to the IT Officer using Form 13. This regulation has been set by Section 197. Upon receiving the nil deduction order, the same must be produced before the TDS deductor as proof.

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• TDS refund claim on FD interest: Few methods are associated with TDS refund claim on fixed deposit interest; it varies depending on a specific situation. When the bank has already levied TDS on your FD interest, assuming you belong to a particular tax bracket, you must file an IT Return. Also, Form 26S is there to evaluate the interest rate and TDS amount. You can find Form 26S on the official website of the Income-tax Department. The IT department calculates the refund amount to be credited to your registered account. One must note that senior citizens are excluded from the TDS deduction rule exercised on FD interest amounts. To enforce this regulation, an individual must submit the Form 15h to the concerned bank branch. If your salary does not belong to any of the tax brackets, all you have to ensure is to submit a Form 15G to the bank before the financial year ends.
• TDS refund claimed on professional fees: This refund policy is considered when excess TDS has been withdrawn under Section 194J. This regulation governs taxation on fees for technical and professional duties. You must file an IT return when the net tax amount is less than the deducted TDS. One must file an IT return implementing Form ITR 3 when he has preserved the book of accounts. Also, he must avail of ITR 4 if he is not having a book of accounts.
• TDS refund of past years: This method involves issuing late filing fees that you must pay while filing the Income Tax return for claiming a TD refund.
• TDS refund on property sales: At the time of owning the property, the buyer should ask for 0.75% to 1% from the seller’s current financial year of TDS. This goes to the IT department. The seller is entitled to the benefit of taking credit for the TDS amount in his tax statement. The process remains more or less similar to claiming a TDS amount refund. You need to file the ITR by contacting the relevant bank branch.

Time Period for a Refund of TDS Amount

The time taken for a TDS refund relies on several events. If an individual has filed the ITR on time, it usually takes 3-6 months to receive the refund amount. The time also gets delayed if the e-verification is not done on time. After waiting for a considerable period, if you do not get the refund money, contact your employer to get hold of Form 16. Thereby contact the nearest branch of the Income Tax Office.

How Can You Monitor TDS Return Status?

You have to visit the e-portal of the Income Tax department and log in to the site with a valid username, password, D.O.B. and captcha. Then you need to navigate to the My Account page and select the option “Refund/Demand Status”. The screen will present the following details:

Complaint Filing Procedure for Late TDS Refund

First, you need to request the Income Tax department for a TDS refund by issuing an ITR if you detect that additional income tax has been deducted from your salary account. If it does not solve the issue within 3-6 months, contact the Income Tax Officer and report a discrepancy. Address the IT Officer via letter putting all the relevant inputs. If there is no proper response, contact the Ombudsman and give him your PAN details, bank statement, Form 16 and the TDS certificate.

Conclusion

Any individual who is struggling to get a TDS refund can indeed receive their deserving hard-earned money by following the steps given in this blog. When taking action, one must always consider all related provisions announced by the Indian government’s IT Act, 1961.