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Deduction of tds on interest on refund..??

Prachi Jindal (CA-Article-Final-Student) (129 Points)

11 July 2013

can anyone please suggest that is govt is required to deduct TDS on the interest on income tax refund..?? if so, whetther form 26 AS will disclose the details and credit will be given..??

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14 Replies

Rajesh (student) (193 Points)
Replied 11 July 2013

Hai, I don't think that govt will deduct TDS on interest for your income tax refund.

they will look, whether you have disclose your interest income on your income tax refund to your Income tax return.

Hope i am clear.

If ,i mistake please let me know i will correct my self.

CA. Kunal Lakhotia (ACA) (1006 Points)
Replied 11 July 2013

As per s194A(3)(viii), no TDS is to be deducted on interest paid under I-T Act.

1 Like

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 11 July 2013

As far as my knowledge goes there is no TDS on interest on refund from Govt. As a consequence there is no display in 26AS too.

Regards,

Ayush Tripathi (ca final) (169 Points)
Replied 12 July 2013

See what ca lunal lakhotia said.. go and see that section

CA Rohit Maurya (Associate) (213 Points)
Replied 12 July 2013

First of all Refund is not a source of Income for the Assessee so there is no case TDS.

BEST OF LUCK.

C.Silambarasan (Finance Executive) (31 Points)
Replied 12 July 2013

Hi All,

The TDS deduction is also applicable on IT refund by give but only refunds paid to non-resident assessees. In my experiance myself assisted the DCIT of international taxation chennai, to file the necessary eTDS returns online for the TDS deductions made by them on the IT refunds issued to non-residents. Hence it is applicable for non-residents and NOT for resident assessees.

Arif Ali (Apt Co Advisory) (1230 Points)
Replied 12 July 2013

No TDS will be deducted. but if interest is payable to NR by Govt then TDS will be deducted u/s 195 without any threshold limit.

Prachi Jindal (CA-Article-Final-Student) (129 Points)
Replied 12 July 2013

thank u all...but the problem is the assessee is a resident assesee and the govt has deducted tds on interest on refund..what to do now..??

CA. Kunal Lakhotia (ACA) (1006 Points)
Replied 12 July 2013

how did u come to knw the same?

C.A. Jignesh N. Mehta (C.A.) (1030 Points)
Replied 13 July 2013

Originally posted by : Prachi Jindal
	thank u all...but the problem is the assessee is a resident assesee and the govt has deducted tds on interest on refund..what to do now..??

you need to file return, offer interest on IT refund to tax and claim TDS against your tax liability.

This may result in a refund.

Prachi Jindal (CA-Article-Final-Student) (129 Points)
Replied 13 July 2013

Originally posted by : C.A. Jignesh N. Mehta
	you need to file return, offer interest on IT refund to tax and claim TDS against your tax liability. This may result in a refund.

Thank you..will definitely follow your advice but i want to know whether the action of govt is correct..?? is there any provision in income tax act for the same..? if yes, under which section..??

C.A. Jignesh N. Mehta (C.A.) (1030 Points)
Replied 13 July 2013

Section 194A

Sub Section 1

Sub clause viii

reads as under

to such income credited or paid by the Central Government under any provision of this Act or the Indian Income-tax Act, 1922 (11 of 1922), or the Estate Duty Act, 1953 (34 of 1953), or the Wealth-tax Act, 1957 (27 of 1957), or the Gift-tax Act, 1958 (18 of 1958), or the Super Profits Tax Act, 1963 (14 of 1963), or the Companies (Profits) Surtax Act, 1964 (7 of 1964), or the Interest-tax Act, 1974 (45 of 1974);]

As per section TDS should not be deducted on interest paid u/s 244A.

TDS will be deducted u/s 195 in case of NR.

Since your case is of resident individual, there seems to be an error by Govt