How do I claim a TDS refund?

1When a TDS refund arises

You're due a refund whenever the TDS deducted exceeds your final tax. The most common situations:

• Bank deducts TDS on FD/interest when your total income is below the taxable limit
• Your employer's salary TDS turns out higher than your final tax after deductions (80C, 80D, HRA)
• TDS on a property sale or professional fees exceeds your actual liability
• You forgot to submit investment proofs to your employer, so excess TDS was cut

2How to claim it — step by step

A refund flows from filing your return correctly:

1. Gather your income details and check the TDS credited in Form 26AS/AIS.
2. File the correct ITR, reporting all income and claiming all eligible deductions, so your real (lower) tax is computed.
3. Pre-validate your bank account on the portal and link your PAN to it.
4. E-verify the return within 30 days — processing starts only after verification.
5. The department processes it under Section 143(1) and credits the refund to your bank account.

3How long it takes and tracking it

Most TDS refunds arrive within 7 to 30 days of e-verification; complex returns can take longer. Track the status on the income-tax portal (Services → Know Your Refund Status) or the NSDL/Protean page. If the refund is delayed beyond the normal period, the department pays you interest at 0.5% per month under Section 244A.

4Avoiding excess TDS next time

You can prevent the over-deduction so you don't have to wait for a refund:

• File Form 121 with your bank if your estimated tax for the year is nil — then no TDS is cut on interest (Form 121 replaced Forms 15G/15H from 1 April 2026)
• Give your employer your investment/rent proofs on time so salary TDS is computed correctly
• Apply for a lower/nil-deduction certificate (Form 13) for large receipts where TDS would far exceed your liability

5The department pays you interest on the delay

A refund is not simply returned at face value. Section 244A provides interest at 0.5% per month, or part of a month, on the amount due.

Where the refund arises from excess TDS or advance tax, interest generally runs from 1 April of the assessment year until the date the refund is granted — provided the return was filed by the due date. File late and the interest runs only from the date of filing, which is a quiet additional cost of missing the deadline.

6Why refunds fail, and what to check first

Most refunds that do not arrive are not being withheld. They failed a validation step and are sitting in a queue.

• The bank account is not pre-validated on the e-filing portal — this is the single most common cause
• The name on the bank account does not match the name on the PAN, including differences of initials or spacing
• The account is closed, dormant, or is a type that cannot receive a refund
• PAN is not linked with Aadhaar, which makes the PAN inoperative and stops the refund

7When the refund is adjusted against an old demand

Under section 245 the department may set your refund off against an outstanding demand from an earlier year, rather than paying it to you.

It cannot do so silently. You must be given a prior intimation and an opportunity to respond, and the response window is short. If the old demand is wrong — commonly it relates to a year where TDS credit was never given — this is the moment to say so, on the portal, under the outstanding-demand response option.

8If tax was deducted but never deposited

A refund can only be claimed against credit that appears in Form 26AS. If a deductor deducted tax from your payment but never deposited it, the credit is absent and the refund cannot be processed.

The remedy is not with the department in the first instance: the deductor is required to deposit the tax and file the TDS return that carries your PAN. Until that return is filed and processed, the entry will not appear. Keep the payment advice or certificate showing the deduction, because it is the evidence that the deduction actually occurred.