TDS is deducted by banks on interest income received from fixed deposits.
In case your PAN details are available with the banks then a percentage of 10% will be deducted as TDS from the interest accrued. Bank has to deduct interest at the end of each year respectively.
In the case of banks don’t have your pan card details then also interest will be deducted but at 20%.
In some situations, sometimes banks having the PAN card of the people deduct interest at 20% only. This is due to the reason that banks might not have your correct pan card or information was either unavailable or missed by the bank.
If more than what was as per the provisions deducted by the bank then below-mentioned points must be taken into consideration for correcting the errors.
- The refund money will be provided to you by income tax department. This is because banks frequently transfer the amount received from public to the income tax department directly.
- Give your pan card information to the banks and make their records correct.
- Inform your respective bank about the difference of TDS deduction of your account.
- Further, you can adjust it from your final tax liability. A person may also get the refund back from the government.
The TDS refund status can be checked online by the taxpayer. He can check whether his TDS refund is sanctioned or not.
Important points to be considered in mind
- If you want to have income tax refund you must file income tax Return first.
- The sooner you file your income tax return the sooner will be the chances to get the refund back from the government.
- Form 16 and form 16 A represents a number of TDS deducted.
Significance of TDS
- It helps in collection of taxes
- It serves as revenue to the government.
- It is a convenient mode of tax payment.
- It lightens the burden of onetime tax payment
An example of a tax refund.
Rohan is working in a multinational corporation in Bangalore. Last year for LIC premium, he got late, therefore, the company deducted extra 10000 as TDS.
Total tax payable by Rohan for the year 2013-14 is 30000
Tax deducted by the employer from Rohan’s salary is 40000.
From the above information, Rohan is eligible for getting a refund of Rs 10000.
Tips for hassle free tax filing.
- As soon as the financial year starts everyone must start planning its tax returns. This will help in great extent to the taxpayer.
- Avoid paying late taxation.
- Management of tax planning is very necessary. Manage your tax so that the amount you expect to be deducted by the employer is actually the same amount that is deducted.