If TDS is deducted more than the tax liability, then you can claim refund by filing ITR. In ITR filing, you have to provide the name of the bank and its IFSC code. By giving both these information, the Income Tax Department will give you a quick and easy refund.
TDS TDS i.e. Tax Deducted at Source. TDS is deducted on your income which is deducted from salary, interest on bank account and rent. If TDS is deducted more than your earning, then
If more tax is deducted than your tax liability in a financial year, then the issue of TDS refund arises. It is calculated by adding the total income from different sources. First of all, you have to know your tax slab for this. According to that slab, your income becomes taxable. Add up all your earnings and find out how much tax has to be paid in a financial year according to the tax slab. If more TDS is deducted than that, then you should claim TDS immediately. The government will compensate for this. If the refund is given late, then interest will be added on it.
How much TDS is deducted
TDS of 10% is deducted on the interest received on the bank account. If your earnings fall in the tax slab of 5%, then you will have to file a tax refund for the additional 5% deducted income. Sometimes too much TDS is deducted on salary. This happens when we do not claim under 80C or do not provide rent receipt to prove the house rent allowance. The way to get this is to calculate your full liability while filing ITR and also know about your TDS deducted. If TDS is deducted more than the tax liability then you can apply for tax refund.
How to claim TDS refund
If TDS is deducted more than the tax liability, then you can claim refund by filing ITR. In ITR filing, you have to provide the name of the bank and its IFSC code. By giving both these information, the Income Tax Department will give you a quick and easy refund. If you do not have taxable income then you have to apply for lower or nil TDS certificate. You can do this work by filling Form 13 under section 197.
You have to submit this form to the TDS deductor. If you are not earning from the interest of banks, then you will have to give information about it under 15G form. ITR refund is credited to your bank account within 3-6 months of filing ITR. The tax department takes so much time because it has to do e-verification.
Interest on TDS refund
If the tax department delays your TDS refund, it will have to pay interest. This money is available with an interest rate of 6%. It is provided under section 244A of Income Tax. The rate of interest is calculated from the first month of the assessment year when ITR is filed till the month when TDS refund is issued. Keep in mind that if the TDS refund is less than 10% of your tax liability, then interest will not be available on it. That is, the amount of TDS refund should always be above 10% of the income taxable amount.