Procedure for refund of excess TDS deducted/ paid

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Analysis of CIRCULAR NO. 2/2011 [F.NO. 385/25/2010-IT(B)], DATED 27-4-2011

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.

  • This Circular 2/2011 is issued in  suppression of  Circular No 285 / 21-10-1980
  • It covers TDS sections 192 to 194LA
  • It does not cover TDS on non-resident payments i.e. section 192, 194E and 195 ( which are  separately covered by circular No. 7/2007)
  • It covers refunds for the period upto 31-03-2010 .
  • Refunds for period thereafter will be covered under provision of section 200A which prescribes processing of TDS Statements

Excess to be refunded :

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

  • the actual payment made by the deductor to the credit of the Central Government; and
  • the tax deductible at source

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

  • 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.

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.

4 thoughts on “Procedure for refund of excess TDS deducted/ paid

  1. Kamal

    Dear Sir,

    We are a TAN Deductor. This query is on behalf of my company with TAN Number: BLRI06248E for which i head the Finance.

    I by mistake made a payment 16lakhs instead of paying 1.6 lakhs just by adding an extra zero when paying TDS of our employees. I intiated a refund process for the challan and then after much struggle got the refund processed. The refund cheque was sent via speed post but the cheque didn’t reach me because of invalid address and was sent back. Now how can i ask the department to send the cheque back or what is the procedure from here ? we are a small company and this mistake of 16 lakhs has costed us a lot but before we could relax that we have got our refund we are now again stuck.

    What is the procedure to ask the department to re-issue the refund, would you be able to help us in this situation to.

    If so please let me know i will be happy to send you the details required.


  2. vishal Makwana

    Sir,I wrongly paid challan twise for Date:-25/11/2014.4th Quater,Now how can i Get Refund plz give solution as soon as earlist as possible

    1. TDSMAN Post author

      Dear Vishal,

      You can use the extra amount paid in your future quarters upto next financial year.


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