How to Claim a TDS Refund: A Complete Guide

TDS stands for Tax Deduction at Source. This system was started by the government of India to ensure that income tax is deducted from your source of income itself. If you’re a salaried individual, you might have noticed that your in-hand salary always has small deductions. One of these deductions is due to direct tax payments that your company makes in your stead. However, that does not mean that income removed as TDS is gone forever! Certain investments and life insurance can provide tax deductions, which in turn can be used to get a TDS refund. TDS refunds are often pleasant surprises that arise when you file your income tax returns for any financial year. This only happens when your actual tax liability is lower than what you’ve already paid through TDS in this period. Think you’re eligible for a refund but don’t know how the claim process works? Then here’s a detailed guide that will help you understand the process for TDS refund.

When Are You Eligible for a TDS Refund?

You’ll be eligible for a TDS refund in various scenarios. Here’s looking at some of them below:

• Scenario 1: Suppose you earn interest on your FD (fixed deposit) and the bank subtracts TDS at 10% on the same. If you’re in the lower tax bracket (5%), then you may be eligible for a refund on the additional amount deducted by the bank.
• Scenario 2: Suppose your company deducts an extra amount from your salary due to non-submission of Section 80C or HRA (house rent allowance) documents. You can then claim a TDS refund for this amount.

Once you calculate your tax liability, you can compare it to the TDS that has already been deducted during the financial year. This will help you understand whether you’ve got a refund due or not. Let us now look at how you can claim the same.

How to Claim a TDS Refund?

Here’s how you can claim your TDS refund online.

• Register on the Income Tax department website to file TDS online.
• Validate your banking details by entering your IFSC and bank account number, then nominating your bank account for the refund.
• After registration, file your IT return by downloading the relevant forms.
• Fill in the necessary details and submit the forms.
• You will get an acknowledgement for the submitted ITR and should E-Verify the same. This can be done via Aadhar-based OTP, net banking, or your digital signature.
• You may also complete the verification by sending a signed photocopy to the Income Tax department.

Note that you will have to provide your bank name and IFSC code during the ITR filing process. This will help the Income Tax Department process and pay your refund without any hitches.

How to Check TDS Refund Status?

Now that your returns are filed, how do you check the status of your claim process? Simply follow the steps given below:

• Login to your Income Tax e-filing account.
• Go to E-File>Income Tax Returns>View Filed Returns.
• Click view details for the relevant assessment year.
• If the ITR has been processed, click on refund status to know more.

You can also verify your refund status through the NSDL website. Here’s how:

• Go to the Services option before choosing status of tax refunds.
• Enter your PAN Number and the relevant assessment year. You will be shown your refund status once you clear the captcha test.

You can also verify your TDS refund status by downloading and checking the annual TDS summary statement (this will have details of the tax refund and demand). Other methods include contacting the jurisdictional Income Tax officer or the Ombudsman of the Income Tax Department. It’s also important to know the meaning behind the various refund status reports provided by the Income Tax Department. Below is a list of TDS status reports and their meaning.

Different Types of TDS Refund Statuses and What They Mean

 

STATUS	MEANING
Refund Paid	Filing has been processed and the amount has been credited to your account
No Demand, No Refund	You are not eligible for any refund and do not have to pay taxes either (a corrected ITR has to be filed if necessary)
Refund Unpaid	Your refund request is accepted, although there are payment issues due to errors in the address/bank details (you’ll have to fix them immediately)
Not Determined	The ITR has not been processed yet
Refund Determined and Forwarded to the Refund Banker	Your refund request has been accepted and the department has informed the banker about it (wait for the amount to be credited)
Demand Determined	You’ll have to pay additional taxes. Check the 143 (1) calculation to find the mismatch/error and file for rectification within the stipulated timeline
Rectification Processed, Refund Determined and Sent Out to Refund Banker	Your corrected returns have been accepted, and the refund amount has been sent to the bank for processing
Rectification Processed, No Demand and No Refund	Your corrected returns have been accepted, but you are not eligible for a refund nor are you liable to pay more taxes
Rectification Processed and Demand Determined	While your corrected returns have been accepted, you still have unpaid tax liabilities

 

Conclusion

Use this guide if you want to claim your TDS refund or check on your refund status. If you file your ITR in time, then you can expect your refund within 1-6 months in most cases. You’ll also

get 6% simple interest on the pending amount in case of delays in repayment. Always ensure that your TDS refund is filed promptly to secure your family’s financial future.

You should also consider investing in tax saving instruments that are eligible for deductions under the Income Tax Act. Term insurance, ULIPs, and guaranteed income plans are just some options worth considering for tax saving.

 

Aastha Mestry - Portfolio Manager 
An Author and a Full-Time Portfolio Manager, Aastha has 6 years of experience working in the Insurance Industry with businesses globally. With a profound interest in traveling, Aastha also loves to blog in her free time.