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Tax Deducted at Source (TDS) is the amount of tax that is deducted by the deductor or the employer from you. The amount deducted is deposited to the Income Tax (IT) department on your behalf. There is no separate form that you need to use to claim a TDS refund. There are certain things that should be kept in mind to claim TDS.

What is the procedure to claim excess TDS on Salary

Tax Deducted at Source (TDS) is the amount of tax that is deducted by the deductor or the employer from you. The amount deducted is deposited to the Income Tax (IT) department on your behalf. The percent (rate) that will be deducted as TDS depends on your age bracket and income.

If you made financial declarations at the start of the financial year that were less than the proof of investment submitted at the year-end, the company would have deducted excess TDS from you. However, you are eligible for a TDS refund.

TDS rate for salaried

TDS rates applicable on your salary are the same as your tax slab rates. If you are less than 60 years of age, your TDS liability is zero for income below Rs 2.5 lakh. 

If you earn between Rs 2.5 lakh and Rs 5 lakh, you are subject to TDS at 5%. Those who earn between Rs 5 lakh and Rs 10 lakh will have a TDS liability of 20%. Taxpayers with earnings above Rs 10 lakh will be subject to a TDS rate of 30%.

How can you claim excess TDS?

There is no separate form that you need to use to claim a TDS refund. You should note the below points before claiming excess TDS:

  • While filing your ITR, you should furnish your Income Tax computation stating the tax payable and TDS deducted. Once you submit the details in the portal, the refundable TDS is displayed, and you can claim it.
  • You do not receive the refund immediately. It can take weeks or months for the TDS to be refunded. However, if the refund is delayed, you receive interest with the refund amount. The interest received is calculated at a simple rate of 6%. The accrual of interest takes place from the first month of the financial year and is taxable under ‘Income from Other Sources.’ 
  • If you do not find the computation satisfactory, you can get in touch with the IT officer or apply for a detailed report online. 

How to check tax refund status?

To check the refund status, you can follow the below steps:

  1. Visit the online e-filing portal and log in to your account using your user id and password.
  2. Search for the section - My Account. Under this section, select the option - Refund/Demand Status.
  3. The section reflects the assessment year, mode of payment, and the status of payment. In case your claim is rejected, you will see the corresponding reason.

Important points related to TDS refund

Below are some points related to the TDS refund.

  • There is a threshold limit for TDS deduction, and it varies according to the payment type. For example, when the FD returns (interest) exceed Rs 40,000 in a financial year, the bank deducts TDS. Similarly, the TDS rate varies for salaried professionals.
  • The refund is only applicable when the paid TDS amount is more than the tax liability.
  • You should mention the details of tax-saving instruments correctly in the ITR form. 
  • Enter the bank details correctly to receive the refund in your bank account.
  • You can file a revised return if you missed claiming the refund while filing the return.

Conclusion

We have shared all the details you need to claim a refund in case the TDS is paid in excess. From your side, you should plan your taxes in advance. Also, invest in 80C deduction and make use of other sections. To avoid excess TDS deduction, remember to submit the investment proofs to your company on time.