Can excess TDS Paid for last Financial year (FY) can be adjusted against current FY

Many a times we face this difficulty that by misstate excess amount is paid against the TDS liabilities. Most of the users are getting panic in this situation. But you don’t need to worry. In todays article I will share with you the way out for this situation.

There are two ways to deal with it:

1. For Deductor’s convenience, CPC (TDS) has established processing logic in the system that can accept a Single Challan for different assessment year. In case tax has been deposited more than the required tax deducted at source for a particular Assessment Year, the excess amount of tax can be claimed in the following quarters of the relevant year. The balance amount if any, can be carried forward to the next year for claim in the TDS statement.

Example: If excess payment of Tax has been made in Quarter 1 of financial year 2020-21, the same can be used for Quarter 2,3&4 of F.Y. 2020-21 as well as for Q1 to Q4 of F.Y.2021-22. The excess amount of tax paid in Q1 of F.Y.2013-14 can also be used for payment of tax default of Q1 to Q4 of F.Y.2019-20.

2. If after following the process of adjusting challan in next financial year, still partial amount is remaining in this challan, then you can apply for the refund of excess TDS deducted or paid. Or some people who do not wanted to adjust the amount in next year can straight away apply for refund.

Procedure to file refund application in case of TDS:

  • Step 1: Login to TRACES website and Go to “Request for Refund” under “Statement Payment Tab“
  • Step 2: Go to Refund Checklist and click on “Proceed “
  • Step 3: Please select Section code:
    • Refund Request for Challan u/s 195
    • Refund Request for Challan other than sec. 195
    • Select Appropriate reason for raising the Refund Request, Click on “Add Challan” after selecting appropriate reason for raising Refund Request.
  • Step 4: Give challan details & if challan pertains to appeal order than enter appeal order number for which deductor wants to claim refund.
  • Step 5: Give Bank details to submit refund request.
  • Step 6: Verification page: Click on “Proceed” to continue TDS refund request.
  • Step 7: Confirmation Page: Click on “Submit Refund Request” to continue TDS refund request.
  • Step 8: Select a “Digital Signature” and proceed.
  • Step 9: 26B has to be submitted within 14 days to the Assessing officer.
  • Step 10: Request will be available under “Track refund Request”.
  • Step 11: Under “Track Refund Request” select search “Option “1 or Option 2” to view Refund Status with remarks.

Some Important information to raise request for Refund on traces:

  • Deductor can apply for TDS refund from FY 2007-08 onwards.
  • It is mandatory to register digital signature on TRACES to submit the Refund Request
  • PAN of Deductor should be same as per TAN Master and TRACES profile and should be non blank.
  • A refund request consists of maximum of Five Challans. For claiming more challans, submit new request.
  • Maximum refund amount will be the minimum challan balance amount in the challan history.
  • Available amount per challan must be greater than Rs.100/-.
  • Ensure that all statement in which the challan has been claimed have been processed before claiming refund for the challan.

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Disclaimer: The contents of this article are for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

(Republished with Amendments by Team Taxguru)

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15 Comments

  1. C D MANGUTTE says:

    Income Tax default notice 2009-10 received for late challan paid. I have paid Interest 22480/-. but, here 14020/- interest paid execess. so, Can i used excess interest 14020/- another FY (i.e. 2011-12 here late challan interest notice rs. 5470/- i have not paid 5470/- till today.)

  2. Ram says:

    Dear Sir

    Tds amount for Aug is Rs.20,225 /-. Payable in Oct for the month of Aug Rs.20225 + with interest Rs.910/- But wrongly deposited the interest amount Rs.21,135/- (Rs.20,225+910) instead of Rs.910/-. how will adjust the balance interest amount. Please suggest me.

    Thanks

  3. yogesh says:

    Sir , our company is in insurance business, the tds certificate issued by our debtor and the amount showing credited and tds deducted is more than actual disburse amount and deducted .so what can we do to finalization the b-sheet.
    Party said that the tds is ded excess and you claim that amount during finalizaton of b-sheet but amount paid/credited showing in 26 AS and form 16 A is much more then we received.

  4. Shrikant Vishwanathan says:

    For the financial year 2009/10 (Assessment Year 2010/11), my TDS is more, as my employer has not allowed me deduction in respect of my LIC premiums and PPF contribution, as I had submitted proof to the employer late.
    I had not so far filed my return of income.
    Now I want to file my return of income for claiming the refund for the Assessment year 2010/11. Please guide me the rule /procedure.

  5. Ganesh says:

    Dear sir,

    i had pay excess TDS payment on salary ( Example-:my employee total TDS deduction is Rs 10000/- ) but time of i was pay Rs 20000/-) please guide

    Thanks

    Ganesh

  6. gowrinaidu says:

    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.

  7. A.C Lahiri says:

    I will be filing my personal return in this assessment year…but last time I had paid tax to the government. What I wanted to know is..the amount already paid by me in the last assessment year as tax, can that amount be adjusted with the current tax payable in this assessment year ??

    I really need to know this…can you please let me know whether that can be possible…in my id.

    Thanks.

  8. sameer says:

    I work under central government and my tax is deducted at source. I have availed a home loan from HDFC bank in Apr 2010 which is not reflected in my pay slip. My loan has not been fully reimbursed by the bank as the flat is still under construction. My loan installment is deducted from Axis bank ( Thru ECS). I have a couple of questions here. 1) I want to avail refund on my home loan. Is it possible.
    2) Can I avail refund for the year 2010. 3) What is the procedure for the same. 4) what documents will I have to get from the bank from both the banks (HDFC and Axis). I am new to filing taxes.

  9. Kailas chavan says:

    Dear ratnakar deshpane,
    As per 16 A i have to pay 2500 rupees as tax which i paid in december 2011 and in same month my employer also cutted my money by way of tax of year 2010-11. by this way i paid tax twice to it department. Please give me the procedure to obtain back the excess it which was cutted by my employer.
    Thanx in advance.

  10. jai parkash sharma says:

    i had filed TDS salary return Financial year 2009-2010 of the company employee one of the employee work in other company earlier his TDS deducted excess and i have deduct less but in the company return i do not mention in the salary TDS return earlier employer detail now demand demand created the income tax TDS department . how to solution the problem.

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