Tax Deducted at Source (TDS) is collected by the Income Tax Department on different types of income, including salary, interest, rent, commission, and professional fees. However, there are situations where the TDS deducted is higher than 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 online process for claiming your TDS refund for FY 2024-25 and AY 2025-26.
- When Can You Claim a TDS Refund?
You can claim a TDS refund 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 was deducted.
- Banks deduct TDS on fixed deposit interest, yet your total income is not taxable.
- Employers deduct higher TDS due to incorrect investment declarations.
- Excess TDS deducted on property sales or capital gains.
- NRIs face higher TDS rates and may require refunds after final tax calculations.
- Pre-requisites for Claiming TDS Refund Online
Before filing your return and claiming the refund, ensure the following:
- PAN is linked with Aadhaar (mandatory).
- Verify Form 26AS to confirm TDS details.
- Cross-check Annual Information Statement (AIS) and Taxpayer Information Summary (TIS).
- Ensure correct bank account details are updated on the income tax portal.
- Step-by-Step Process to Claim TDS Refund Online
Step 1: Log in to the Income Tax Portal
- Visit: https://www.incometax.gov.in
- Log in using your PAN and password.
Step 2: Download Form 26AS & AIS
- Navigate to “View Form 26AS” under the e-Filing section.
- Check the total TDS deducted for the year.
- Verify AIS and TIS data for accuracy.
Step 3: Choose the Correct ITR Form
Select the right form based on your income source:
- ITR-1 (Sahaj) → Salaried individuals with income up to ₹50 lakh.
- ITR-2 → Individuals with capital gains or multiple income sources.
- ITR-3 → Individuals earning business or professional income.
Step 4: File Your ITR
- Enter your income, deductions, and TDS details carefully.
- Ensure TDS figures match Form 26AS to avoid refund delays.
Step 5: Submit & e-Verify Your ITR
- Submit your return online and complete e-verification via:
- Aadhaar OTP
- Net Banking
- Digital Signature Certificate (DSC)
- Refund processing begins only after successful e-verification.
- How Is the TDS Refund Credited?
After your ITR is processed, the refund amount is directly credited to the bank account specified in your return.
- How to Check Your TDS Refund Status
- Log in to the Income Tax e-Filing Portal.
- Go to “View Filed Returns” under the e-File
- Select the relevant assessment year to view your refund status.
- Interest on Delayed TDS Refunds
If your refund exceeds 10% of your total tax liability, you’re entitled to 6% simple interest per annum under Section 244A.
⚠ Note: This interest is taxable and must be reported under “Income from Other Sources.”
- Common Reasons for TDS Refund Delays
- Incorrect or outdated bank account details.
- Mismatch between TDS figures in ITR and Form 26AS.
- ITR not e-verified on time.
- PAN-Aadhaar linkage issues.
- Filing the wrong ITR form.
Conclusion
Filing your ITR accurately and verifying all details is the key to receiving your TDS refund without delays. Always ensure that Form 26AS, AIS, and ITR data match perfectly.
For complex cases—such as NRI taxation, property sale refunds, or high-value refunds—it is advisable to consult a qualified tax professional to ensure proper compliance and faster processing.
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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.