My friend is M.D. of his Pvt Ltd. company. The company has Fixed Deposits with SBI. The SBI deducted TDS on interest on FD @ 20 % instead of 10 %. The excess amount of TDS comes to Rs. 55000. The bank issued Memo to concerned staff but has regretted to reverse the deduction. Now the company has paid all tax liabilities in full. The company has to claim refund which may come after very long time. The bank refuses to make immediate refund of excess deduction. Isn't it illegal for bank to deduct such exces TDS ? How to force bank to refund the amount of Excess TDS forthwith ? What is the legal remedy other than claiming refund while filing return ?
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Excess deduction of tax at source
Replies (2)
TDS once made & paid to the credit of Cent Govt, cannot be claimed otherwise than by way of a refund while filing the I-T return.
Hence there is no remedy to claim the excess refund from the bank. There is no legal provision under the act to punish the deductor if he deducts excess tax. however you can intimate the bank to take care going forward & deduct tax at the applicable rates only.
You should highlight such acts of the bank to the bank's highest forum to avoid repetition. Complain to banking ombudsman if necessary. Do not renew the FDs on their maturity with the same bank branch -- place the FDs with some other bankers to teach a lesson, if you have no other facilities from that bank like WC limits, overdrafts etc.
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