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