A TDS refunds are generated when the amount of tax withheld is more than the taxpayer’s actual tax burden. It is common practice to discover, at the end of a given fiscal year, that the projections regarding investments made at the beginning of that year do not correspond with the actual assets made throughout that year.

TDS refunds are issued when there is a disparity between the amount of tax deducted in its entirety after a fiscal year and the amount of income tax expected to be paid for that particular year.

What is a TDS Refund?

TDS refund is the process of claiming the excess tax deducted at source by the payer. For example, if the TDS deducted from your salary is Rs. 30,000, but your actual tax liability is only Rs. 20,000, then you are eligible for a TDS refund of Rs. 10,000. The TDS refund can be claimed by filing an income tax return (ITR) with the Income Tax Department.

TDS Refund Period

The TDS refund period is the time taken by the Income Tax Department to process and refund the excess TDS deducted. The TDS refund period varies depending on various factors such as the amount of refund, the mode of refund, the accuracy of the information provided, etc. Generally, the TDS refund period is around 3 to 6 months from the end of the financial year in which the TDS was deducted.

Instructions On How To Apply For Your TDS Refund:

If you follow the processes that are listed below, you will be able to get your TDS refund:

1. Step 1: Step one is to File Your Income Tax Returns if your employer has withheld an amount from your paycheck greater than your actual tax liability under the TDS heading.
2. Step 2: In the second step, you will need to provide the essential information, including your bank’s name, bank account number, and IFSC code.
3. Step 3: After the tax return mentioning the TDS refund has been submitted, it typically takes a few months for the income tax officer to process the returns and authorise the refund.

TDS Refund for Different Payments

TDS refund can be claimed for various payments such as salary, rent, interest, commission, etc. Let’s understand the TDS refund process for different payments:

TDS refund for salary: If the TDS deducted on your salary is more than your actual tax liability, then you can claim the TDS refund by filing the ITR. The TDS refund will be processed by the Income Tax Department after verifying the details provided in the ITR.

TDS refund for rent: If the TDS deducted on the rent paid to you is more than your actual tax liability, then you can claim the TDS refund by filing the ITR. You need to provide the details of the rent received and TDS deducted in the ITR.

TDS refund for interest: If the TDS deducted on the interest earned by you is more than your actual tax liability, then you can claim the TDS refund by filing the ITR. You need to provide the details of the interest earned and TDS deducted in the ITR.

TDS refund for commission: If the TDS deducted on the commission received by you is more than your actual tax liability, then you can claim the TDS refund by filing the ITR. You need to provide the details of the commission received and TDS deducted in the ITR.

How to Claim TDS Refund Online?

You can claim the TDS refund online by filing the ITR on the Income Tax Department’s website. Follow the steps below to claim the TDS refund online:

• Visit the Income Tax Department’s website – www.incometaxindiaefiling.gov.in
• Login to your account using your PAN and password
• Click on the ‘e-File’ option from the dashboard and select ‘Income Tax Return’ from the drop-down menu
• Select the relevant assessment year and ITR form
• Fill in the details of your income, deductions, and TDS
• Verify the details and click on the ‘Submit’ button
• After submitting the ITR, download the acknowledgment and keep it for future reference

How to Check TDS Refund Status?

You can check the TDS refund status online on the Income Tax Department’s website. Follow the steps below to check the TDS refund status:

• Visit the Income Tax Department’s website – www.incometaxindiaefiling.gov.in
• Login to your account using your PAN and password
• Click on the ‘View Returns/Forms’ option from the dashboard
• Select the relevant assessment year and click on the acknowledgment number of the ITR for which you have claimed the TDS refund
• The TDS refund status will be displayed on the screen

Interest on TDS Refund

If the TDS refund is not processed within the TDS refund period, then the taxpayer is eligible for interest on the TDS refund. The interest is calculated at the rate of 0.5% per month or part of the month from the end of the TDS refund period to the date of actual refund. The interest amount is automatically credited to the taxpayer’s bank account along with the TDS refund.

How to File a Complaint for a Delay in Income Tax or TDS Refund?

If there is a delay in processing the income tax or TDS refund, then you can file a complaint with the Income Tax Department. Follow the steps below to file a complaint:

• Visit the Income Tax Department’s website – www.incometaxindia.gov.in
• Click on the ‘Contact Us’ option from the menu bar and select ‘Feedback/Complaints’
• Fill in the details of your complaint and submit it
• You will receive a complaint number which can be used to track the status of your complaint

Different TDS Refund Statuses

When it comes to your income tax refund, understanding the status codes and the necessary actions to take is vital. Here’s a breakdown of various refund statuses and the actions associated with each:

• Refund Paid:
  • Meaning: Your filed Income Tax Return (ITR) has been processed successfully, and the refund has been credited to your account.
  • Action: Verify the refund received in your bank account. If you haven’t received the refund, contact your registered bank to resolve any issues.
• No Refund Since There Was No Demand:
  • Meaning: Your tax liability is zero, and you are not eligible for any refunds.
  • Action: If you have claimed a refund but received this status, review your ITR and the comparison received from the IT Department. If there are discrepancies, file a corrected return if necessary.
• Refund Unpaid:
  • Meaning: The IT department has approved the refund, but it couldn’t be paid due to incorrect bank or address details.
  • Action: Raise a refund reissue request on the income tax portal and ensure your bank and address details are accurate.
• Undetermined Refund Status:
  • Meaning: Your ITR has not yet been processed.
  • Action: Wait for a few days and recheck the status later.
• Refund Determined and Forwarded to the Refund Banker:
  • Meaning: The IT Department has approved the refund, and the refund banker has been notified.
  • Action: Wait for the refund to be credited to your bank account. If necessary, you can contact the refund banker for updates.
• Demand Determined:
  • Meaning: Additional tax payment is required due to discrepancies between your tax calculation and the IT department’s calculation.
  • Action: Verify the tax calculation under section 143(1). If there’s an error, rectify it by paying the outstanding tax within the specified timeframe. If you believe the IT 
  • Department’s calculation is incorrect, file a rectification with supporting information.
• Correction Made, Reimbursement Calculated, and Information Submitted to Refund Banker:
  • Meaning: Your corrected return has been accepted, and the refund amount has been recalculated and sent to the bank for processing.
  • Action: Confirm the refund receipt by checking your bank account.
• Rectification Processed and Demand Determined:
  • Meaning: Your rectified return has been accepted, but unpaid tax obligations (demands) have been identified.
  • Action: Cross-check all information within the specified time frame and pay the outstanding tax demands.
• Rectification Processed, No Demand and No Refund:
  • Meaning: The income tax department has accepted your corrected return, and there are no tax demands or refunds owed.
  • Action: No further action is required.