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Tax Deductions

How To Claim Your TDS Refund: Types of Refund Status

On the Income Tax website, you can check the status of your TDS refund by using your PAN card number.

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What is TDS Refund?

When the amount of tax paid as TDS by a taxpayer exceeds their actual tax liability, they can claim a refund of the excess amount paid. The refund can be claimed by filing the Income Tax Return (ITR) and providing details of the bank account and IFSC code during the online filing process. 

Put simply, if an individual declares lower investments than what they actually make in a financial year, they may be eligible for a tax refund.

Taxpayers fall into different tax brackets based on their income levels. For example, if you earn interest income from an FD, the bank may deduct a standard 10% TDS on the accrued interest. However, if you belong to the lower 5% tax bracket, you can apply for a TDS refund for the excess amount that has been deducted.

You may also claim a TDS refund if there is excess TDS deducted from your salary because you didn't submit your investment proofs under Section 80C or rent receipts for House Rent Allowance to your employer.

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How To Claim TDS Refund

If the amount of tax deducted does not match your actual tax liability, you can compute your taxable income and taxes, submit an income tax return (ITR), and request a refund.

While filing your ITR, you will be asked to provide your bank name and IFSC code. This helps facilitate the refund process by enabling the IT department to transfer any excess tax paid directly to your bank account.

TDS deducted on fixed deposit:

If your taxable income is below the basic exemption limit, you can submit a declaration in Form 15G to your bank at the start of the financial year. This declaration notifies the bank that you do not have taxable income, and as a result, no tax (TDS) will be deducted from your interest income.

You can claim a refund by filing your income tax returns in case the bank deducts tax (TDS) on your interest income despite your submission of the Form 15G declaration,

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For senior citizens with FD accounts:

Individuals aged 60 years or above, commonly referred to as senior citizens, are eligible for an exemption from tax deductions (TDS) on interest earned from bank deposits. Nevertheless, this exemption only applies if the annual interest from deposits with each bank does not exceed Rs. 50,000.

If your interest income exceeds the threshold limit mentioned above, but your overall income falls below the basic exemption limit (after section 80 deductions), you can provide your bank with a Form 15H at the start of the financial year. This form informs the bank that you do not have a taxable income and hence no tax (TDS) will be deducted from your interest income. If the bank deducts tax on the interest income earned from your fixed deposit despite your eligibility for an exemption, you can claim a refund by filing your ITR.

When Employer Deducts More Than The Actual Income Tax Payable:

If your taxable income falls below the basic exemption limit, you can prevent tax deduction at source (TDS) from your salary by submitting Form 13 to your jurisdictional Income Tax Officer, as per Section 197. 

This form requests a lower or Nil TDS certificate. You can furnish the Nil deduction under section 197 to the TDS deductor.

If the tax deducted at source (TDS) is not equal to the actual tax payable, you must calculate your taxable income and taxes, and file your Income Tax Return (ITR) to claim a refund of TDS. 

During the online ITR filing process, you must provide your bank account and IFSC code. These details are required by the Income Tax (IT) department to process your TDS refund.

How To Claim a TDS Refund Online?

The process of claiming a TDS refund online is simple and hassle-free, and it is integrated with filing your income tax return. Here are the steps to follow:

Firstly, to claim the tax refund, one has to register on the https://www.incometax.gov.in/iec/foportal portal of the income tax department. 

Secondly, you need to choose the relevant ITR form from the website and download it.

After this, fill out the selected ITR form with the essential details and submit it on the website.

After the submission of the form, an acknowledgment will be generated by the website which you must e-verify using a digital signature.

Lastly, e-verify the acknowledgment by the digital signature, Aadhaar-based OTP, or net banking. In case being incapable of e-verify the ITR, You can send a physically signed copy to the tax department.

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How To Check The Status of Your TDS Refund?

  • Log in to the Income Tax website using your username and password.
  • After logged in to the website, go to the "My Account" section.
  • Under "My Account," select the option for "Refund Status."
  • A new page will appear, showing the details of your assessment year, payment mode, and refund status.

What is the TDS Refund Period?

The period for receiving a refundable amount credited to your bank account after filing your ITR on time usually takes 3 to 6 months. However, the duration of this process can vary based on the completion of the e-verification process.

How To Verify The TDS Refund Status?

  • Go to the Income Tax e-filing portal and log in using your credentials.
  • Click on the "My Account" tab and select "View Form 26AS (Tax Credit)" from the dropdown menu.
  • Select the appropriate assessment year and verify your identity through Aadhaar OTP or net banking.
  • Once your identity is verified, you will be able to view your Form 26AS, which contains details of your TDS deducted and the TDS refund status.

Types of Income Tax Refund Status, Meaning & Action to be taken

Refund Paid

Meaning: This shows that the Income Tax Return (ITR) filing is processed, and the refund is credited to your account.

What To do: Verify the received refund with the bank.

Demand determined

Meaning: This refund means that you are obliged to pay additional tax because the tax calculation was different as per the calculation of the income tax department.

What To do: You should review the calculation performed under section 143(1) to identify any discrepancies or errors. If an error is identified, you must pay the outstanding amount to the IT department within the given timeframe. However, if no errors are found, you can file a rectification request along with all necessary documents and evidence to support your refund claim.

Refund determined and forwarded to the refund banker

Meaning: The refund request has been accepted by the IT department and the refund banker has been informed.

What To do: You may wait for the refund amount to be credited to your account, or you can contact the refund banker to inquire about the status of the refund payment.

Not Determined

Meaning: This means that your income tax refund has not been processed.

What To do: You can check the status of your refund again after a few days to see if there have been any updates.

No demand no refund

Meaning: You are not liable to pay any taxes or entitled to receive any refunds.

What To do: After requesting a refund, it is important to review the comparison received from the IT Department and file a corrected return if any corrections are necessary.

Refund Unpaid

Meaning: The IT department has approved the refund, but it cannot be disbursed due to an error in bank or address details.

What To do: You need to raise a refund reissue request and update the relevant bank or address details on the income tax portal so that the IT department can process the refund payment again.

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Rectification processed and demand determined

Meaning: The revised tax return has been accepted, but there are outstanding tax obligations (tax demands) that need to be settled within a specified time frame.

What To do: Once you have verified all the information within the specified time frame, you must pay any outstanding taxes or tax demands.

Interest on TDS

If you delay in refunding the tax amount, the income tax department will be calculated at the rate of 6% simple interest. The levied interest rate is started from the initial month of a financial year.  Under Section 244A of the Income Tax Act, if there is a delay in the payment of the applicable TDS refund by the IT department, they are required to pay the refund amount with a simple interest of 6%. This interest is calculated from the first month of the assessment year in case of ITR filed by the due date, or from the date of filing of the returns in any other case.

Frequently Asked Questions–

  • Why do we collect TDS?

The concept of collecting TDS was introduced to collect the tax from various sources of income.

  • When will the tax refund be credited?

The time taken for a credited refund depends on the completion of the e-verification process. After the verification, the refund is processed to the bank account.

  • Can I get a refund of my tax?

Yes, You can get a refund of your tax deducted at the source if you have paid it in excess of the actual payable amount.

  • How many types of TDS are there?

There are two types of TDS. One is form-16 Which is issued to the employees by the employer consisting of the details of deducted made through the year. The second is form-16A which is used for the TDS deductions other than salary.

  • Where can I check my income tax refund status?

You can check the tax refund status on the NSDL website and (https://www.incometax.gov.in/iec/foportal) Income Tax website.

  • What is form 16?

This is a kind of certificate given by the government under section 203 of the Income Tax act. This certificate is named Form 16.

Also, Read: "TDS - Its Purpose And Liabilities".
 

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Krishna Gopal Varshney

An editor at Myitronlinenews
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Krishna Gopal Varshney, Founder & CEO of Myitronline Global Services Private Limited at Delhi. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. Visit our website for latest Business News and IT Updates.


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