What is TDS Refund?
Section 51 of the CGST Act 2017, specifies the authority and process for “Tax Deduction at Source” under the GST system. A TDS Refund results when the taxes paid via TDS are more than the actual tax due determined for the Financial Year. After combining money from multiple sources, it is resolved.
TDS Refund for Different Payments
If your employer withholds more tax from your paycheck than is legally required by your filed IT return, as was said in the aforementioned example, when you submit your income tax return, any discrepancy between the tax deducted by your employer and the actual tax due is resolved. You must provide your bank’s name and IFSC number when you complete your income tax return. The income tax division will find it simpler to refund the extra tax you paid as a result.
If you are a senior person with fixed deposit accounts, you are not eligible to deduct any interest from your taxes. To prevent the bank from deducting income tax on the interest generated on your fixed deposit accounts, you must fill out and submit form 15H if you are over 60 and hold these accounts. When you submit your IT return, you may also choose to have the refund deposited to your bank account. Following that, the IT department determines the tax that applies to you, makes adjustments for any excess tax paid, and refunds the money back to the bank account you specified on your IT return form.
How to Check Refund Status?
To check the TDS refund status, follow these steps:
- Visit the GST website at https://www.gst.gov.in/.
- Utilize your GST credentials to log into the portal.
- Select “Refunds” from the “Services” menu by clicking on it.
- Tap “Track Refund Status.”
- Choose the fiscal year for which you wish to verify the status of your refund.
- Type in the refund application number and your GSTIN.
- Select “Search.”
The TDS refund status will be displayed on the screen.
Different TDS Refund Status?
The different TDS refund statuses are:
- Processed: This status shows that the tax authorities have processed the TDS refund claim and have produced the refund amount.
- Approved: This status shows that the tax authorities have granted the applicant’s request for a TDS refund and have credited the applicant’s bank account with the requested amount.
- Rejected: This status indicates that the tax authorities have rejected the TDS refund application due to missing or inaccurate information or supporting documentation.
- Pending: This status means that the tax authorities are still processing the TDS refund claim and have yet to decide whether to accept or reject it.
- Ready for Payment: According to this status, the applicant’s bank account may be credited with the TDS refund amount.
- Refund Paid: This status shows that the applicant’s bank account has been credited with the TDS refund amount.
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How to claim your TDS Refund?
- Log in or register on the Income Tax Department’s online e-filing website, incometaxindiaefiling.gov.in.
- Complete the appropriate Income Tax Return (ITR) form with the necessary information.
- The portal produces an acknowledgment after receiving the ITR.
- Use a digital signature, a net banking account, or an Aadhaar-based one-time password to electronically authenticate the acknowledgment (OTP).
How to claim TDS Refund online?
To claim TDS (Tax Deducted at Source) refund online, follow these steps:
- Register yourself on the e-filing portal of the Income Tax Department (https://www.incometaxindiaefiling.gov.in/home).
- Login to the e-filing portal and click on the ‘e-File’ tab.
- Choose the appropriate Income Tax Return (ITR) form for the financial year for which you want to claim the refund.
- Fill in the ITR form with all the required information, including your TDS certificates (Form 16 or Form 16A).
- Upload the required supporting documents and submit the ITR form.
- If the TDS amount shown in the certificates is more than your tax liability, the Income Tax Department will process the refund after verifying your return.
- You can track the status of your refund on the e-filing portal or by calling the TIN Call Centre.
- The refund will be credited to your registered bank account through an Electronic Clearing Service (ECS) or by a cheque sent to your registered address.
What is the Time Period?
This comprehensive guide provides an in-depth understanding of GST TDS refund, including its eligibility criteria, procedures, and benefits.
The TDS refund amount is deposited into the taxpayer’s connected bank account 3–6 months after the submitted ITR. It should be remembered that the e-verification process speed will determine how quickly the excess TDS amount is refunded.
If there is an excess TDS on income, the Income Tax Department will determine whether or not to return it to the taxpayer.
TDS Refund Example
Here’s an example of TDS (Tax Deducted at Source) refund calculation:
Suppose, Mr. A’s total taxable income for the financial year 2022-23 is Rs. 10,00,000 and the TDS deducted by his employer during the year is Rs. 1,50,000. Mr. A files his Income Tax Return for the financial year 2022-23 and calculates his tax liability to be Rs. 1,20,000.
Since the TDS deducted is more than Mr. A’s tax liability (Rs. 1,50,000 > Rs. 1,20,000), Mr. A is eligible for a TDS refund of Rs. 30,000 (Rs. 1,50,000 – Rs. 1,20,000).
The refund will be processed by the Income Tax Department and credited to Mr. A’s registered bank account through an Electronic Clearing Service (ECS) or by a cheque sent to his registered address.
Interest in TDS Refund
If the TDS (Tax Deducted at Source) refund is not processed by the Income Tax Department within 1 year from the end of the financial year in which the return was filed, interest is payable to the taxpayer. The interest is calculated at the rate of 6% per annum and is calculated from the 1st day of the assessment year till the date of refund.
How to file a complaint for a delay in Income Tax or TDS refund
To file a complaint for a delay in your Income Tax or TDS (Tax Deducted at Source) refund, you can follow these steps:
- Check the status of your refund on the e-filing portal of the Income Tax Department (https://www.incometaxindiaefiling.gov.in/home) or by calling the TIN Call Centre.
- If the refund is delayed, you can file a complaint on the e-filing portal under the ‘Complaints’ section.
- Fill in the required details and briefly describe the issue you are facing with your refund.
- Submit the complaint and take note of the complaint reference number for future reference.
- The Income Tax Department will investigate the complaint and take necessary action to resolve the issue.
- You can follow up on the status of your complaint by calling the TIN Call Centre or by checking the situation on the e-filing portal.
It is advisable to keep all relevant documents and information handy while filing the complaint to help the Income Tax Department resolve the issue faster.
- Will I get a TDS refund even if I still need to provide my bank account details in the TDS Certificate or Income Tax Return?
For the Income Tax Department to send the refund money through NEFT straight to your account, your accurate bank account information must be included in your TDS Certificate or ITR. Any error in the bank account might result in either a delay and non-transfer of the money or a transfer to someone else. The address you listed in the ITR or connected to your PAN must be accurate if you haven’t given one, since the tax agency may issue you a check for the refund amount if you haven’t.
- How do I change my address so I can receive the refund cheque?
To change your address so that you don’t miss your TDS (Tax Deducted at Source) refund cheque, you can follow these steps:
- Use your PAN and password to log in to the Income Tax Department’s e-filing website (https://www.incometaxindiaefiling.gov.in/home).
- Select the “Address Details” option under the “Profile Settings” heading.
- After updating your address, press the “Submit” button.
- By selecting the “Verify” option, you may confirm the address ve been performed.
- The new address will be recorded in the Income Tax Department’s databases when the modifications are confirmed.
- Is there an option to change contact details from what I provided in the ITR?
Yes, you can change your contact details from what you provided in your Income Tax Return (ITR).
To update your contact details, you can follow these steps:
- log in to the e-filing portal of the Income Tax Department (https://www.incometaxindiaefiling.gov.in/home) using your PAN and password.
- Go to the ‘Profile Settings’ section and click on the ‘Contact Details’ option.
- Update your contact details, such as your email ID and mobile number.
- Submit the changes and verify the updates made to your contact details.
You must update your contact details with the Income Tax Department to receive important updates and communication related to your TDS (Tax Deducted at Source) refund and other tax matters.
- How many different kinds of tds refund statuses are in the e-filing portal?
- Refund Processed: This status indicates that the TDS refund has been completed, and either a check or a credit to your bank account has been provided for the refund amount.
- Refund in progress: This status shows that the Income Tax Department is processing the TDS refund.
- Refund Returned: According to this status, the TDS refund has been sent back to the Income Tax Department due to a mistake in the submitted bank account information.
- Refund Denied: This result indicates that the Income Tax Department has rejected the TDS refund owing to an inconsistency in the information given.
- Refund Hold: This status shows that the TDS refund is on hold because the taxpayer is still needed to provide certain information or explanation.
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