16 Jul 2021 | 5 min read
What is TDS Refund?
It is required to know that when the taxes paid through TDS exceed the actual tax payable determined for the Financial Year, a TDS Refund occurs. It's computed by adding together all of your earnings from various sources. As taxpayers, we are all classified into different tax brackets. Let's say you have a savings account that pays you interest.
If there is a financial declaration at the beginning of the year, which is less than the investment proof submitted in the financial year ending then, the individual is entitled to a refund of taxes.
In simple words, it is observed that the amount deducted from a taxpayer's income, such as wages, interest from bank accounts, rent, and so on, is known as tax deducted at source (TDS). You may be eligible for a TDS Refund if the TDS collected exceeds what you owe the government. A TDS refund occurs when there is a discrepancy between the amount tax deducted at the end of a financial year and the income tax you are required to pay for that year. Let's take a deeper look at this idea.
In case the employer deducts more tax than the applicable amount of ITR filing
In the above example, there is a mismatch between tax deducted by the employer and the actual tax payable is taken care of while filing the income tax return. When an individual files the income tax return, they are supposed to quote the bank name and IFSC Code. It makes an easy way for the income tax department to return the excess tax that has already been paid.
If the income is below the tax slab and the lender deducts tax from the fixed deposit account
If an individual’s salary falls outside of the income tax level and your bank has deducted tax on your fixed deposit interest, you have two options for recovering the tax.
If a senior citizen with fixed deposit accounts
Tax deductions on interest received on fixed deposits are not available to senior citizens. If there is over 60 and have fixed deposit accounts, there must fill out and submit Form 15H to ensure that the bank does not withhold income tax on your FD interest.
Alternatively, when the user files the IT return, it may be easy to refund the credited to the bank account. The IT department then calculates the tax due to the applicant, adjusts the overpayment, and credits the money back to the bank account specified on the user’s IT return form.
The I-T Act of 1961 makes it essential to file a TDS return. The following are some of the following benefits of filing Income Tax Returns:
Online filing, often known as e-filing, allows you to file returns from the comfort of anywhere whether from your own home or workplace, and on short notice. The following are the general steps of how to file income tax returns online:
At the time of filing an income tax return, there will be all sum up of the individual’s income from various sources, finding the tax liability, and then, subtract the TDS applied on your income. This information will help you to file an income tax return, TDS Refund, and different payments on TDS. For more details contact Afinoz.com.