What is TDS and how to claim it?

What is TDS?

TDS is income tax reduced from the money paid at the time of making specified payment such as commission, professional fees, rent, salary, interest etc. by the persons making such payments. 

With the help of government of tax deducted at source provisions make sure that income tax is deducted in advance from the payment which being made by you.

When should TDS be deducted and by whom?

The person who making specified payments mentioned under the income tax act, are required to deduct the TDS at the time of making such specified payment. 

If the person making the payment is an individual or an HUF whose books are not required to be audited and if you submit investment proofs to your employer for claiming deduction and the total taxable income is below then the taxable limit then you don’t have to pay any tax and no TDS should be deducted on your income.

How to deposit TDS?

By using challan ITNS-281, the tax deducted at source has to be deposited on the government portal.

How and when to file TDS returns?

It is mandatory to all the persons who have deducted TDS. It is submitted quarterly and details need to be furnished like TAN, types of payment, PAN of deductee, amount of TDS deducted etc. Many forms are prescribed for filling returns depending on the purpose of deduction of TDS.

What is TDS certificate?

Form 16, Form 16A, Form 16B, Form 16C, these all are TDS certificate. It have to be issued by a person deducting TDS to the assesse from whose income TDS was deducted while making the payment. 

Bank issued the Form 16A to the depositor when TDS is deducted on the interest from fixed deposit and Form 16 is issued by the employer to employee.

What is TDS refund?

It arises when taxes are paid by the way of TDS are greater than the actual tax payable calculated for financial year. It calculated after the consolidating income earned from the various sources. 

When you filing your income tax return, you would sum up all the income from various sources, find the tax liability and subtract the TDS applied to your income. If TDS is higher than your total tax liability for financial year that means refund is due from the government.

How to check TDS refund status?

• By acknowledgement and refund processing e-mail from IT department
• By using the pan card number
• By calling CPC Bangalore

How to claim TDS refund?

There are three easy and simple steps to claim the TDS refund. 

1. The very first is when your employer deducts more than the income tax payable amount:
   Further, when the tax is been deducted and it does not match with the payable amount, you can easily file an ITR Income Tax Return and claim your TDS return. When you fill the ITR you need to enter your bank details like IFSC code so that the IT department could easily find your details and claim your refund.
2. TDS refund on fixed deposit:
   When you don’t have a taxable amount, you need to fill up a declaration form 15G before the end date to your bank to let them know that you don’t have the taxable amount. 
3. For senior citizens FD accounts:
   If you are of 60 or more years old and you have a fixed deposit amount so you can easily earn 50,000 annually from the tax deduction on the fixed deposit interest. In case, you don’t have the taxable amount even after claiming from the interest through fixed deposit account you can fill up the declaration form and tell your bank that you don’t have the taxable income. 

What is the TDS refund period?

If you have filed your ITR on the time then it takes approximately 3 to 6 months for refund to be credited in your account. It also depends on the completion of e-verification.