Tax Deducted at Source (TDS) is deducted from different types of income, such as salary, interest, rent, or professional fees, before the recipient receives the payment. However, if the total TDS deducted during a financial year is more than your actual tax liability, you are eligible for a TDS refund.
This blog explains how to claim a TDS refund online, the documents required, timelines, and how to track the refund status through the income tax portal.
Introduction
TDS is a mechanism employed by the government to receive income tax in advance, at the time of generation of income itself. Although it provides for consistent collection of revenue and discourages evasion of taxes, it sometimes results in over-deduction of taxes, particularly when your income happens to be below the threshold taxable amount or even after excluding deductions and exemptions.
In such situations, the sole method of claiming a refund of TDS is by submitting your Income Tax Return (ITR). The refund amount is processed by the Income Tax Department after verifying your return and is credited directly to your bank account. With the introduction of the new income tax portal, the entire refund process is now completely online and paperless.
When Can You Claim a TDS Refund?
A TDS refund is triggered in a number of typical situations. Knowing when you can claim helps prevent lost claims or pointless tax payments.
- Salary Income Below Taxable Limit
If you are a salaried person drawing below Rs 5 lakh per year, you are actually exempt from tax as per Section 87A. But your employer may deduct TDS even so. By reporting ITR and disclosing your real income and deductions, you can recover the entire TDS as a refund.
- Fixed Deposit Interest
Banks deduct 10% TDS on FD interest if it exceeds Rs 40,000 (Rs 50,000 for senior citizens) in a financial year. If your total income is within the exempt limit or you have sufficient deductions to nullify the tax, you can claim the deducted TDS back.
- Freelancers and Consultants
Professionals often receive payments after 10% TDS under Section 194J. But if their total taxable income is low or the net income after expenses is below the threshold, the TDS becomes refundable after ITR filing.
Documents and Information Required
To claim a TDS refund online, keep the following ready –
- Form 26AS – Shows all TDS deposited against your PAN by various deductors
- TDS Certificates – Form 16 (from employer) or Form 16A (from banks/others)
- Bank account details – Should be pre-validated on the income tax portal
- PAN and Aadhaar – Both must be linked and updated
- Income and deduction details – As per actual income and eligible exemptions/deductions under sections like 80C, 80D, etc.
Steps to Claim TDS Refund Online
Step 1. Log in to the Income Tax Portal
Go to https://www.incometax.gov.in and log in using your PAN (User ID) and password. Register if you’re a new user.
Step 2. Check Form 26AS or AIS
Before filing, download your Form 26AS and check your Annual Information Statement (AIS) to ensure all TDS entries match your income.
Step 3. File Your Income Tax Return (ITR)
- You have to navigate to “e-File” → “Income Tax Return”
- Select the relevant assessment year and ITR form (typically ITR-1 for salaried individuals)
- Fill in your income details, deductions, and TDS information
- The system automatically pulls the TDS data from Form 26AS
- Ensure the TDS figures match, and your tax payable is less than tax paid; this indicates a refund.
Step 4. Submit and E-Verify Your ITR
After reviewing your return, submit it and complete e-verification through Aadhaar OTP, bank account, or net banking.
Step 5. Wait for Refund Processing
Once filed and verified, your ITR will be processed by the CPC (Central Processing Centre), and the refund, if any, will be credited to your bank account.
How to Track Your TDS Refund Status?
You can check the TDS refund status in two ways –
- On the Income Tax Portal
- Log in → Go to “e-File” → “Income Tax Returns” → “View Filed Returns”
- Select the relevant ITR and view refund status under the “Status” tab
- On the NSDL Refund Tracking Site
- Visit https://tin.tin.nsdl.com/oltas/refundstatuslogin.html
- Enter PAN and assessment year to view real-time status
The status will show messages like “Refund Paid”, “Refund Failed”, or “Under Processing”.
What If the Refund is Not Received or Fails?
If your refund fails or doesn’t reflect in your account –
- Ensure your bank account is pre-validated and linked to PAN
- Check for ITR processing errors in the “View Filed Returns” section
- Raise a refund reissue request on the portal
- Contact the CPC helpline if needed, or submit a grievance online
In case of delays beyond 3 months, you may also be eligible for interest on the refund under Section 244A.
Common Mistakes to Avoid While Claiming TDS Refund
Filing for a TDS refund is easy, but minor errors may lead to delays or even rejection. Here’s what you should avoid –
- Mismatch between Form 26AS and ITR – Always verify that the TDS claimed in your return matches the amount reflected in Form 26AS or AIS. Even a Rs 1 mismatch can cause a hold-up.
- Not e-verifying the ITR – Filing the return is not enough, it must be e-verified to complete the process.
- Incorrect bank account – Refunds are only processed to a bank account that is pre-validated and linked to your PAN on the income tax portal.
- Filing under the wrong ITR form – Using the incorrect ITR form (e.g., ITR-1 instead of ITR-4 for freelancers) can result in notices or rejections.
- Missing due date – To ensure timely refunds and avoid interest or penalties, always file your return before the deadline (typically July 31 for individuals without an audit).
Being cautious at these stages can help ensure a smooth refund process and avoid unnecessary notices from the department.
Conclusion
Claiming a TDS refund online is a streamlined, fully digital process but it depends on accurate income reporting, correct TDS credits, and timely ITR filing. If you’ve had excess tax deducted during the financial year, don’t let it go unclaimed. File your ITR on time, verify your details, and track the refund until it’s credited.
With the right documents and a step-by-step approach, you can recover your refund quickly and avoid any follow-up complications.
Related Service
Reference
The Income-Tax Act, 1961 (Act No. 43 of 1961)
