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:
Some Important information to raise request for Refund on traces:
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(Republished with Amendments by Team Taxguru)