In this blog post, Mohammed Azharuddin, legal counsel at Borderless Access Panels Pvt. Ltd and a student of Diploma in Entrepreneurship Administration and Business Laws by NUJS, provides the procedure and duration for claiming a tax refund. 




The Indian taxation laws permit the assessee to claim refunds for excess tax paid to the government during a financial year. A tax refund applicable to employees could be termed as and falls under the following: Tax Deduction at Source at a rate higher than the actual tax (2)

Under the current scenario, the companies ask their employees to submit a proof of their tax returns & savings investment so that such savings and investment can be set off against the tax that is deducted.

As per the Income Tax Act 1961, section 237 and 245 deals with provisions relating to refund of taxes and any such refunds arise on an assesse satisfying to the assessing officer that the amount of tax paid by the assesse for any year exceeds the amount of tax payable by him.


Procedure to Claim Refund

Following is the procedure to claim refund:

  • For any assesse to claim a refund under the IT Act, he/she shall do so by filing form 30.
  • Under the ordinary course, there is no necessity for filing any form and tax refund may be claimed during/while filing the Income tax
  • There is no tax applicable for refunds as the same is receipt of excess tax paid and not income earned.
  • It takes 4 to 6 months from the date of filing the Income Tax returns to receive the refund.
  • The claim of a refund shall be made within one year from the last date of the assessment year.
  • In the event of occurrence of any delay due to any reason whatsoever then an application for condonation shall be filed before the tax authorities provided that any request for condonation shall not be applicable If the same is extended beyond six years.
  • Eligibility for Interest on the refund shall arise and is calculated at the rate of 0.5% per month and 6% per annum from the first day of assessment year until the date when the refund is paid to the assesse.
  • A rejection on tax refund may happen in the event of incorrect calculation of tax payable by the assesse.


Refund on TDS

Tax Deduction at Source is a means of collecting tax in India. TDS is required to be deducted at the time of making any payments and such deductions are deposited with the Income Tax department. The Income Tax Act mandates deduction of any permissible payments as tax within a range of 1% to 10%.

Procedure for claiming TDS refund

  • There are no specific forms to be filled for claiming tax deduction as the same needs to be mentioned while filing the income tax returns. 
  • The ideal time frame to receive a refund under this claim if 4-6 months and any refund to be received shall have an interest coverage of 6% per annum if the refund payable is more than 10% of the total payable for that year.
  • TDS is applicable on the following transactions as per the IT Act:
    • Transfer of immovable property other than agricultural land.
    • Payments made to a contractor / sub-contractor for carrying out any work.
    • Payment of rents.
  • Deduction of TDS is usually done by the companies while paying any professional fee to its consultants and the current rate of such deduction is 10%.


Refund on Service tax:

During any transaction of commercial nature, if service tax is paid more than the actual liability then the assesse shall be entitled to claim a refund on the excess tax paid since such assesse shall not be able to adjust tax paid against subsequent payment of (4)

Procedure to claim refund*

  • The application has to be made in the prescribed form (Form – R).
  • The application has to be filed in triplicate with the jurisdictional Assistant/Deputy Commissioner of Central Excise/Service Tax.
  • The application should be accompanied by documentary evidence to the effect that the amount claimed as refund is the amount actually paid by him more than the Service Tax due and the incidence of such tax claimed as refund has not been passed on to any other person.




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