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URGENT HELP REQUIRED.

Akhil Gupta (Manager F&A) (856 Points)

14 June 2010

Dear Sir,

Our company had by mistake deposit TDS on Salary in excess of TDS deducted in December 2009 and adjust the same in Jan - Mar 2010 in the TDS Return for IIIrd and IV quarter, but there is still a balance of Rs. 45000/- is lying unadjusted.

Now what to do in such a situtation?

Whether

This excess amount of TDS be adjusted from the TDS liability of next Financial Year?
This excess amount be adjusted from any other tax liability (like Income Tax on PGBP)?

Simplly we have to file a claim for refund of the same.

What is the procedure to be followed for filling of refund of excess TDS deposited.

Please help

Thaks in advance.

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7 Replies

SRINIVASA MURTHY (Asst Manager (Finance)) (186 Points)
Replied 14 June 2010

There is no such provisions in the Income tax Act /rules to adjust the TDS by the assesee himself .

The excess payment would be the difference between the actual payment made by the deductor and the tax deducted at source or that deductible, whichever is more. This amount should be adjusted against the existing tax liability under any of the Direct Tax Acts. After meeting such liability the balance amount, if any, should be refunded to the assessee.

But assessee can apply for a refund for excess TDS deposit subject to that giving a declaration that, we have not issued a TDS certificate to deductee(s) in respect of excess amount deducted.After getting application department can adjust the TDS against tds Deductible or can issue refund order.

Plz refer to Circular No:285 of IT for more information

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Ram Avtar Singh (Nagari Sultanpur U.P.Delhi) (14497 Points)
Replied 14 June 2010

Department to give excess TDS refund to Deductor

Finance Act - 2 of 2009 brings in a system of TDS reconciliation for each TAN holder. This is made through introduction of a new section 200A under Income Tax Act.

As per the new section, TDS statement(s) of every TAN holder will be processed after the Financial year, by following steps:

Any arithmetical mistakes/incorrect claims in the statement will be adjusted and the actual TDS deductible will be calculated.
Interest, if any will be calculated on based on the details provided in the statement for deductions and challans.
Then the computed total will be matched with the Total challans paid by the TAN holder for that financial year and the difference will be identified as Balance Payable / Refundable.
Department will then send an intimation to the TAN holder, mentioning the balance amount payable / refundable.
If such an amount is refundable, department will grant the refund to the Deductor.

This change will be implemented from April 2010. So, this would also be effective for returns filed in 2009-10 Financial Year. For the purpose of same, department is automating the TDS return processing internally.

The copy of Section 200A is provided below for reference.

Section 200A.

Where a statement of tax deduction at source has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:—

the sums deductible under this Chapter shall be computed after making the following adjustments, namely:—
1. any arithmetical error in the statement; or
2. an incorrect claim, apparent from any information in the statement;
the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement;
the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of amount computed under clause (b) against any amount paid under section 200 and section 201, and any amount paid otherwise by way of tax or interest;
an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (c); and
the amount of refund due to the deductor in pursuance of the determination under clause (c) shall be granted to the deductor:

Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed.

Explanation.—For the purposes of this sub-section, “an incorrect claim apparent from any information in the statement” shall mean a claim, on the basis of an entry, in the statement—

of an item, which is inconsistent with another entry of the same or some other item in such statement;
in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act;

2. For the purposes of processing of statements under sub-section (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub-section

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Akhil Gupta (Manager F&A) (856 Points)
Replied 14 June 2010

Would this mean we have filed TDS return with balance TDS deposit as refundable. And should we forward the same to our TDS Circle Officer with a request of refund or it is gerenated automatically.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 14 June 2010

Thanks for the PM bro…but can’t help you as am totally out of touch from accounts and Tax and cannot misguide by a foolish reply. Excuse me this time…

Rgds

CA Shiv (Business Controller) (2987 Points)
Replied 14 June 2010

Hello Akhil,

I am sorry but i dont understand copy paste of acts and circulars...

The better and simple is to claim the refund first and also to intimate the TDS officer regarding the same. He may direct you to file revise return. But in your case you have made mistake in depositing TDS. so only way is to claim the refund. Intimate the TDS officer and he will guide you easily.

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