Tax Deducted at Source (TDS) is collected by the Income Tax Department on various types of income such as salary, interest, rent, commission, or professional fees. However, there are situations where excess TDS is deducted compared to your actual tax liability. In such cases, you can claim a TDS refund online while filing your Income Tax Return (ITR).
This guide explains the complete process of claiming your TDS refund online, applicable for FY 2024-25 and AY 2025-26.
- When Can You Claim a TDS Refund?
A TDS refund can be claimed when the total TDS deducted during the financial year exceeds your actual tax liability. Common scenarios include:
- Your income is below the basic exemption limit, but TDS is deducted.
- Banks deduct TDS on FD interest, but your total income is not taxable.
- Employers deduct higher TDS than applicable due to incorrect tax projections.
- Excess TDS deducted on sale of property or capital gains.
- NRIs face higher TDS rates and may need refunds after computing final tax liability.
- Pre-requisites for Claiming TDS Refund Online
Before filing for a TDS refund, ensure the following:
- PAN is linked with Aadhaar (mandatory).
- Form 26AS is checked to confirm the TDS deducted.
- Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) are verified.
- Correct bank account details are updated in the income tax portal for refund credit.
- Step-by-Step Process to Claim TDS Refund Online
Follow these steps carefully to file your ITR and claim your refund:
Step 1: Visit the Income Tax Portal
- Go to https://www.incometax.gov.in
- Log in using your PAN and password.
Step 2: Download Form 26AS and AIS
- Navigate to “View Form 26AS” under e-Filing.
- Check the total TDS deducted during the year.
- Verify AIS and TIS for accuracy.
Step 3: Select the Appropriate ITR Form
Choose the correct form based on your income source:
- ITR-1 (Sahaj) → For salaried individuals with income up to ₹50 lakh.
- ITR-2 → For individuals with capital gains or multiple income sources.
- ITR-3 → For individuals earning business or professional income.
Step 4: File Your ITR
- Enter your income details, deductions, and TDS information.
- Ensure the TDS figures match Form 26AS to avoid processing delays.
Step 5: Submit and Verify Your ITR
- Submit your return online and e-verify it using:
- Aadhaar OTP
- Net banking
- Digital Signature Certificate (DSC)
- Only after verification will your refund request be processed.
- How is TDS Refund Credited?
Once the Income Tax Department processes your ITR, the refund amount is directly credited to your bank account mentioned in the return.
- How to Check Your TDS Refund Status
Follow these steps:
- Log in to the Income Tax e-Filing Portal.
- Go to “View Filed Returns” under e-File.
- Check the refund status for the relevant assessment year.
- Interest on Delayed TDS Refunds
If the refund amount is more than 10% of your total tax liability, you are entitled to receive simple interest at 6% per annum under Section 244A. This interest is also taxable and must be reported under “Income from Other Sources.”
- Common Reasons for TDS Refund Delay
- Incorrect bank account details
- Mismatch between TDS figures in ITR and Form 26AS
- ITR not e-verified
- PAN and Aadhaar not linked
- Errors in selecting the correct ITR form
Conclusion
Claiming a TDS refund online is a straightforward process if you verify your details, file your ITR accurately, and complete the e-verification on time. Ensuring that Form 26AS and AIS data match your ITR will help avoid unnecessary delays.
For complex cases—like NRI taxation, property sales, or high-value refunds—it is advisable to consult a tax professional to ensure proper compliance and faster processing.
If you have any further questions or need assistance, feel free to reach out to us at admin@ushmaassociates.com or info@nricaservices.com, or contact us via call/WhatsApp at +91 9910075924.
Stay Updated, Stay Compliant!
Disclaimer: Aim of this article is to give basic knowledge about the topic to people who are not in touch with Indian tax norms. When anybody is dealing with these kinds of cases practically, he shall consider all relevant provisions of all applicable Laws like FEMA/Income Tax/RBI /Companies Act etc.
