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Refund of tds

Mohan (Audit Assisstant & Accounts Manager) (489 Points)

20 October 2012

The assessee inadvertently paid TDS on profession fee in the second quarter for the Asst.Year 2013-2014, how to obtain refund of the same? What are the formalities/procedures to be followed?

Thanks in advance

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3 Replies

CA Manish (Job) (5264 Points)
Replied 20 October 2012

CIRCULAR NO. 2/2011 [F.NO. 385/25/2010-IT(B)], DATED 27-4-2011

If a deductor has deposited excess amount of TDS , the procedure for getting refund was given in Board Circular 285 dated 21-1-1980. Now CBDT has issued new circular in this respect.

This Circular 2/2011 is issued in suppression of circular No 285 / 21-10-1980
It covers TDS sections 192 to 194LA
It does not cover TDS on non-resident payments i.e. section 192, 194E and 195 ( which are separately covered by circular No. 7/2007)
It covers refunds for the period upto 31-03-2010 .
Refunds for period thereafter will be covered under provision of section 200A which prescribes processing of TDS Statements

Excess to be refunded :

The excess payment to be refunded would be the difference between:

the actual payment made by the deductor to the credit of the Central Government; and
the tax deductible at source

Excess payment discovered during financial year

In case such excess payment is discovered by the deductor during the financial year concerned, the present system permits credit of the excess payment in the quarterly statement of TDS of the next quarter during the financial year.

Excess payment discovered after financial year

In case, the detection of such excess amount is made beyond the financial year concerned, such claim can be made to the Assessing Officer (TDS) concerned.
However no claim of refund can be made after two years from the end of financial year in which tax was deductible at source.

Safeguards to avoid double claims

To avoid double claim of TDS by the deductor as well as by the deductee, the following safeguards must be exercised by the Assessing Officer concerned:

The applicant deductor shall establish before the Assessing Officer that:

(i) it is a case of genuine error and that the error had occurred inadvertently;

(ii) that the TDS certificate for the refund amount requested has not been issued to the deductee(s); and

(iii) that the credit for the excess amount has not been claimed by the deductee(s) in the return of income or the deductee(s) undertakes not to claim such credit.

Prior approval of the Additional Commissioner is required for refund in excess of Rs. 1 Lakh

Prior approval of the Commissioner is required for refund inexcess of Rs. 10 Lakhs

After meeting any existing tax liability of the deductor, the balance amount may be refunded to the deductor.

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Mohan (Audit Assisstant & Accounts Manager) (489 Points)
Replied 20 October 2012

Well, these are the guidelines but how is one suppose to obtain the refund? Whether the assessee has to write to the officer or file TDS return shoiwng deduction of tax against no expense etc. How is one suppose to go about it?

Thanks again