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Tds refund

Zigmin (ACCOUNTS MANAGER) (24 Points)

11 September 2012

I am a director of Pvt. Ltd. compnay followed under Tax Audit. In FY 2011-12 my accountant has paid excess TDS under the head contract 194C. Due to his lake of experience & knowledge, now we are unable to get the benefit / adjustment in the same year.

Now, i want to know that is there any producre to claim refund or adjust the excess paid TDS in the FY 2012-13 ?

I will Thankful to the club for prompt response.

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11 Replies

venkatesh (learner) (116 Points)
Replied 11 September 2012

you can made credit to your deducted party.

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CA Manish (Job) (5264 Points)
Replied 11 September 2012

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.

Gunjan Tulsyan (Article) (222 Points)
Replied 11 September 2012

Generally TDS paid is never refunded back...u may write it off as sundry balance written off and take benefit of it as an expense...!!!!

CA Manish (Job) (5264 Points)
Replied 12 September 2012

Originally posted by : Gunjan Tulsyan
	Generally TDS paid is never refunded back...u may write it off as sundry balance written off and take benefit of it as an expense...!!!!

The Balance W/off cannot be claimed as an allowable expenses because tds paid is one type of income tax which cannot be allowed in computing the taxable income.

HARISH BANSAL (student) (229 Points)
Replied 12 September 2012

I think What is the problem in this Case ? Let say for the payment of Interest Rs.10000/- u have deducted TDS of Rs.2000/- instead of Rs.1000. Then u can make payment to Deductee Party Rs.8000. And Thereafter Deductee Party can Claim TDS in 26AS.

Regards,

Harish Bansal

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CA Manish (Job) (5264 Points)
Replied 12 September 2012

Originally posted by : HARISH BANSAL
	I think What is the problem in this Case ? Let say for the payment of Interest Rs.10000/- u have deducted TDS of Rs.2000/- instead of Rs.1000. Then u can make payment to Deductee Party Rs.8000. And Thereafter Deductee Party can Claim TDS in 26AS. Regards, Harish Bansal

You are right. But for this treatment party should be ready to accept less payment (in your example Rs 8000/-). Sometimes party may not agree to receive the less payment and then to claim the TDS. In that case we have to apply for refund of TDS because carry forward of excess of TDS paid is possible only within the financial year.

Ashish Pareek (General Manager) (298 Points)
Replied 12 September 2012

Dear you might or might not get refund of the same amount but u will alter the year of your TDS paid as: -

1. you just break the challan in to two form

a) Break challan in the amount as equal, which you deducted the TDS of your parties & second is to the remaining Balance

b) now draft a letter to the assessing officer, who assess you TDS return, as to alter the challan amount & assessment year the previous one remain same but amount differ as TDS been deducted by you & second one the rest balance which deposited extra by you may become a new challan which contains a new assessment year & the residue balance

this letter may be sent only u/s of RTI act i.e.; Right to Information, & post it by register AD

i hope it will help you

parthasarathy (ceo) (21 Points)
Replied 12 September 2012

Dear sir,
We are paying Freight in Cash & Cheque less than Rs20,000/- for sending material to clients. Please advise us whether TDS Deduction is necessary for the Freight payment.
If it is more than 20,000 whether Tax deduction is necessary.
Please advice.

Thanking you
Accounts Department
Orientceramics
TN

S Jananikrishna (Learner) (219 Points)
Replied 12 September 2012

Hi Parthasarathy,

Freight is indirectly contract only.... Hence tds provisions will be applicable u/s194C

For a day - limit - 30000/-

For the Year-limit - 75000/-

Only wen it crosses the limit u will be liable to deduct TDS as per the provisions of Income Tax Act.

Dont confuse whether u paid by Cash or cheque and all.

If it is paid by cash, beyond 35000/- ur expenditure will be disallowed u/s 40A(3) of Income tax act.

I hope it will be helpful

1 Like

Varshit Shah (Self Employed) (676 Points)
Replied 16 September 2012

Originally posted by : S Jananikrishna
	Hi Parthasarathy, Freight is indirectly contract only.... Hence tds provisions will be applicable u/s194C For a day - limit - 30000/- For the Year-limit - 75000/- Only wen it crosses the limit u will be liable to deduct TDS as per the provisions of Income Tax Act. Dont confuse whether u paid by Cash or cheque and all. If it is paid by cash, beyond 35000/- ur expenditure will be disallowed u/s 40A(3) of Income tax act. I hope it will be helpful

Sir there is no TDS applicability if Transporter provide his PAN no. Pls refer sec. 194C. Also Limit of 30000/- is not a daywise limit. Sir 30000/- is for single payment.

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Ravi Kumar Mahaur (CA-FINAL) (202 Points)
Replied 16 September 2012

you are not eligible to claim refund of the excess tds deducted and paid earlier but the deductee can claim the refund or can set-off this amount with his/her tax liability