TDS Refund timeline on cancellation of sale deed

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Pulkit Aggarwal

Pulkit Aggarwal (Querist)
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18 February 2024 What is the timeline to get the refund of TDS for cancellation of sale deed?

Asha Kanta Sharma

Asha Kanta Sharma

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11 July 2024 The timeline to receive a refund of TDS (Tax Deducted at Source) for cancellation of a sale deed can vary based on several factors and procedures involved in the refund process. Here’s a general overview of the timeline and steps involved:

### 1. Initiation of Refund Process:

- **Cancellation of Sale Deed:** When a sale deed is cancelled, any TDS deducted at the time of the original transaction needs to be adjusted or refunded.

- **Initiating Refund:** The process typically begins with the taxpayer (seller) informing the deductor (buyer) about the cancellation and requesting them to file a TDS correction statement to reflect the cancellation and claim a refund of the TDS amount.

### 2. Filing TDS Correction Statement:

- **Time Taken:** Once notified, the deductor (buyer) should file a correction statement with the Income Tax Department through the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal.

- **Processing Time:** The processing time for the correction statement can vary. It generally takes a few weeks to a couple of months for the correction to be processed and reflected in the Income Tax Department's records.

### 3. Assessment and Verification:

- **Verification Process:** After the correction statement is filed, the Income Tax Department verifies the details submitted, including the cancellation of the sale deed and the request for refund.

- **Communication:** If any discrepancies or issues are found during verification, the department may communicate with the deductor or taxpayer for clarification or additional information.

### 4. Refund Issuance:

- **Refund Processing:** Once the correction statement is processed and verified, and if everything is in order, the Income Tax Department initiates the refund process.

- **Timeline for Refund:** Refunds are typically processed within a few weeks to a couple of months from the date the correction statement is processed successfully.

### 5. Communication and Tracking:

- **Communication Channels:** Taxpayers can track the status of their refund through the Income Tax e-Filing portal under 'My Account' > 'Refund/Demand Status'.

- **Bank Account Details:** Ensure that correct bank account details, including MICR code and IFSC code, are provided for timely credit of the refund amount.

### Important Considerations:

- **Accuracy of Information:** Ensure all details regarding the cancellation of the sale deed and the TDS correction statement are accurate and promptly communicated to the deductor and the Income Tax Department.

- **Follow-up:** If there are delays or issues with the refund process, taxpayers can follow up with the Income Tax Department or seek assistance from a tax professional.

### Conclusion:

While there is no fixed timeline due to variations in processing times and verification procedures, refunds for TDS on cancellation of sale deeds are generally processed within a reasonable timeframe, provided all necessary steps are completed accurately and promptly. For specific cases or further clarification, it’s advisable to consult with a tax advisor or directly with the Income Tax Department.