Paid more Tax than Necessary on your Form 16? Get your TDS Refund in Minutes

Remember the time when you paid extra for a movie ticket and the person at the ticket counter called you back to repay your money? Well, a refund on your Tax Deducted at Source (TDS) is something similar. TDS is a tax that is deducted directly from your income. This means, before you receive your income, a certain percentage of money is deducted as tax and remitted to the government. And in case, an excess amount is deducted at the source, you are provided with a refund. This is known as TDS refund. In this article, let’s find out the difference between Form 16A and 16B and also how to claim your TDS returns in a matter of minutes.

TDS is Refundable

You are eligible to claim a TDS refund if the amount you paid as tax during the year is greater than what you would actually pay.

For example, you have to pay Rs.40,000 during a particular assessment period. However, the tax deducted at source during this period was Rs.45,000. Then, the TDS refundable amount is Rs.5,000 (Rs.45,000 – Rs.40,000).

Who is Required to Issue a TDS Certificate?

According to Section 203, any person who deducts tax at source is required to issue a certificate to the payee. This certificate tells that tax has been deducted at source in addition to other details. This document is known as a TDS certificate. For employees who receive a monthly salary (including pension), the certificate that is issued is known as Form 16.

What are Part A and Part B of Form 16?

Form 16 certificate has two parts: Part A and Part B.

Part A consists of details of the employer and the employee. This includes name, address, and employment period, Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). Part B of Form 16 contains details of salaries paid to the employee, other incomes, tax payable and deductions allowed. It contains a detailed summary of salary break-up, investments made under Section 80C and deductions allowed under the Income Tax Act. In addition, there is also Form 16, Form 16a and Form 16b.

How to Claim TDS Refund?

Claiming a TDS refund has become very easy. The IT section of the Income Tax Department has shifted the entire refund process online. As a result, you can claim your refund through the e-filing website. The process is similar to filing your tax returns.

You need to enter relevant information such as your current income, investments and TDS details into the online form. Once this is done, the software calculates the difference between how much income tax you have paid during the period and how much tax is actually owed. The difference between these two values is the TDS refund amount owed to you. The IT department generally processes your TDS refund request within a period of 4-8 months. Here is all you need to know TDS on fixed deposit, how it is applicable on the earning interest and how it is charged.

In case you are eligible for a refund, you are notified the amount you will receive as a refund. In addition, if the refund amount is more than 10% of the total tax payable during the assessment year, you also earn an interest on the refund amount. Here the interest rate is 6% per annum on the refund amount.

Conclusion

You can always claim for a refund in case the TDS exceeds the actual amount payable as tax. Sometimes, the IT department may find an error in your calculations and hence you may not be eligible for a tax refund. In these cases, you have the option to contact the Assessing Officer to get a clarification. However, if your calculations are correct, you will receive a refund on your TDS as per the guidelines laid down by the IT Department.

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About This Author

Aditi Ahuja Aditi Ahuja is a noted financial consultant and adviser. Joined: August 23rd, 2018