Tax Deducted at Source (TDS) is a crucial mechanism in India’s taxation system that ensures the government receives taxes in advance. However, there are situations when the amount deducted exceeds the actual tax liability of the individual or business. In such cases, the excess TDS can be claimed as a refund by filing an accurate Income Tax Return (ITR).
Handling TDS refund claims can be complex, especially if there are errors in the deductor’s filings or discrepancies in Form 26AS. This blog explains everything you need to know about TDS refunds—how they occur, the steps to claim, how to correct errors, and how professional support can simplify the process, especially for those based in Kerala.
If you’re facing issues with TDS refund claims or need help with compliance, OurTaxPartner.com provides dedicated support for individuals and businesses across Kerala.
Common Scenarios Where Excess TDS is Deducted
Excess TDS deductions can happen due to several reasons. Some of the most common cases include:
- The deductor applied the wrong TDS rate (e.g., 10% instead of 5%)
- Your income was below the taxable threshold, but TDS was still deducted (common in bank FD interest)
- TDS was deducted on income that is actually exempt
- The same income was taxed twice due to double deduction
- The deductor used the wrong PAN or did not file the TDS return correctly
- Multiple employers or clients deducted TDS, pushing total TDS beyond tax payable
How to Claim a TDS Refund
To claim a TDS refund, you must file your Income Tax Return (ITR) for the relevant financial year, declaring your total income and TDS deductions. If your actual tax liability is less than the TDS credited to your PAN, the Income Tax Department will process the refund after verification.
Steps to Claim a TDS Refund:
- Log in to the Income Tax e-Filing Portal
- Download Form 26AS and reconcile it with your records
- Prepare and file your ITR using the correct form (e.g., ITR-1, ITR-4, ITR-3)
- Declare all income and taxes deducted (auto-filled in most cases)
- Ensure bank account is validated for receiving refunds via ECS
- Submit the return and e-verify it through Aadhaar OTP, net banking, or DSC
The refund is usually credited to your bank account within a few weeks to a few months, depending on the processing speed and whether any scrutiny is involved.
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Correcting Errors Before Claiming Refund
One of the main causes for refund rejection or delay is mismatch in data. Here’s how to ensure accuracy before filing:
- Check PAN number in Form 16/16A and Form 26AS
- Verify deductor’s TAN, amount deducted, and section codes
- Ensure all incomes and TDS are correctly mapped
- Communicate with deductor to file a correction statement if they made an error
- In case of error in your own ITR, file a revised return before the due date
If TDS is not reflected in Form 26AS, the Income Tax Department will not allow the credit—even if you have the certificate. Therefore, always confirm that TDS details are updated in 26AS before filing your return.
What to Do If Refund is Delayed
In most cases, refunds are processed automatically after the return is verified. However, delays can happen due to:
- Mismatch in ITR and Form 26AS data
- Pending verification or scrutiny from CPC (Central Processing Centre)
- Incorrect or unverified bank account details
- Outstanding tax demand from previous years
You can track your refund status through the e-Filing portal or the NSDL Refund Status Portal. If the delay is over 6 months, you may also be eligible for interest under Section 244A.
TDS Refunds for Businesses
Businesses also face TDS refund issues due to over-deduction, double entry, or incorrect accounting. Refunds arise when:
- Vendor payments had excess TDS deduction and lower final income tax liability
- Contractor bills were duplicated during TDS accounting
- Advance tax and TDS together exceed final tax due
Corporates, partnerships, and LLPs must ensure proper PAN mapping, GST-TDS coordination (where applicable), and quarterly reconciliation of TDS entries to avoid blocked funds.
To manage all of this professionally, explore TDS Reconciliation and Refund Support from OurTaxPartner.com.
Interest on Delayed Refunds
As per Section 244A of the Income Tax Act, if your refund is not issued within the due processing time, you are eligible for interest at the rate of 0.5% per month (6% per annum) on the refund amount, calculated from the date of return filing till the date of refund.
This interest is taxable and should be shown under “Income from Other Sources” in the next year’s return.
How Professionals Can Help with TDS Refund Claims
When it comes to TDS refund claims, timely action and precise documentation are critical. Professional tax consultants can offer the following benefits:
- Review of Form 26AS and Form 16/16A
- Identification of excess deductions and mismatch errors
- Coordination with deductors for correction statements
- Accurate ITR preparation and reconciliation
- Refund tracking and representation in case of disputes
Businesses and individuals in Kerala can access full-service TDS support from OurTaxPartner.com, ensuring seamless refund processing and compliance.
Conclusion: Don’t Leave Your Money Unclaimed
Excess TDS deductions are fairly common, especially for salaried individuals with multiple jobs, freelancers with variable income, or small businesses with large advance payments. The good news is—this money can be claimed back through a structured and accurate ITR filing process.
Whether you’re facing a mismatch, unsure how to reconcile Form 26AS, or waiting on a delayed refund, don’t let these complications pile up. Partner with experts who know the process inside-out.
Visit www.ourtaxpartner.com/filing-service/tds-compliance/ to get your TDS refund claim processed smoothly and professionally.
