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Refund of Withholding Tax certicate

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Aryan

Sr. Accountant

198 Points Posted on 12 October 2021

Dear Income tax expert,

We have a question regarding refund of Withholding Tax Certificate. We had mostly foreign projects last year, they deducted withholding tax and gave us withholding tax certificates. Certificate has been obtained under DTAA with India. Now my question is ITR last year some amount of our refund is coming out, will the department refund us, because last year we had 50% deposit advance tax and balance tax was withholding tax.

Does Income Tax Department give refund on Withholding Tax or not?

Replies (3)

Quick Summary

This discussion explores the possibility of obtaining a refund for withholding tax deducted on foreign projects, particularly when covered under a Double Taxation Avoidance Agreement (DTAA) with India. While the Income Tax Department generally refunds excess tax paid, it's important to note that foreign taxes withheld in other countries may have specific rules for claiming Foreign Tax Credit, and scrutiny assessments might be required before a refund is finalised.

JGM

Knowledge Sharer

285 Points Posted on 14 October 2021

Yes. Income tax department does refund the excess tax amount. However, there may be scrutiny assessment before the final refund is determined.

Aryan

Sr. Accountant

198 Points Posted on 18 October 2021

I understood, but department every time not considered U/s 90 - Withholding tax amount.

JGM

Knowledge Sharer

285 Points Posted on 18 October 2021

Are the taxes withheld in India or they are withheld in other country(ies). If it is latter case, then you cannot claim refund of excess foreign taxes paid. There are specific rules in place for claiming Foreign Tax Credit