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  • Category: Tax Planning

    How to get back wrong TDS debited and remitted by bank without PAN

    Wondering how to claim a TDS which is wrongly remitted without PAN? Looking out for the detailed procedure to make this claim? Find advice to resolve your issue here.

    My son had a Recurring deposit account opened when he was a student. The period was for three years and the total interest for the whole three years was about twelve thousand rupees( Maturity value minus total instalments remitted). Just by chance I found that an amount of Rs 676 being 20% TDS on interest amount of Rs3382 was deducted and already sent without PAN. It was a shock to me.
    The bank never intimated us about this. We did not get any SMS alert and we were not asked to submit PAN. We also did not have even the slightest imagination about TDS because the interest in a year is just pittance and not anywhere near the threshold of Rs 10,000/- Even the total of thre years is just twelve thousand or so.

    I found this when I went for updating the passbook as it was nearing its maturity. Unlike the early system of just showing the monthly instalment and date,I suddenly saw some odd entries. The bank explained that now they have the system of showing interest accrued also. Then my academic curiosity led the counter staff explore and he/she divulged that TDS is deducted. Shocked!

    I have asked(in writing) the bank to remedy and rectify. Today I have sent a reminder to the bank after 25 days lapse.

    Can any one tell me how to claim the wrong TDS because it is sent without quoting PAN?
  • Answers

    4 Answers found.
  • For tax purposes, the interest accrued in a year is taken as the income during that particular year. If the income of a person is expected to fall below the basic limit then he is supposed to fill form 15G in the first quarter of the year and submit it in duplicate in the bank branch where deposit is there so that bank does not deduct TDS and sends your form 15G to the tax authorities for information.

    Now if due to some reason form 15G could not be submitted in bank then the bank officials in a routine way deduct the TDS and deposit it to I T department and it will reflect in form 26AS in the internet site of Income Tax.

    The only way to get this amount refunded is to fill an I T return and now a days refund is being promptly given by them.

    The system of TDS was basically for the fixed deposits of the banks and was not very particular for saving bank or recurring deposits. Now Govt wants to link every deposit or investment to link to the income tax and these new measures are coming in force.

    Please remember that if you would not have deposited this amount in your son's name, you might have paid income tax on the income on that from any avenue. By shifting it to your son's name by way of gift or whatever you have not paid tax on it. Now as per rules and regulations it is your son's responsibility ( or yours if he is ignorant) to take care of this from tax point of view and fill form 15G in time.

    Knowledge is power.

  • When you have an RD or FD in a bank, it is mandatory for them to cut TDS. If any depositor doesn't want the deduction as he is not in the tax bracket, the depositor has to submit to bank Form 15G. This form generally bank will ask when you are opening the account itself. Even though you have no PAN number bank will send it to IT department by name and your account details.
    First of all, you have to take the Form 16 from the bank, in which they will give you the details money deducted from the account and the details of the remittance to IT department.
    Once you get the form 16, you have to submit IT returns in which you can show your nil tax liability and claim for the money sent to IT department. The IT department will scrutinize your returns and arrange the payment either through account transfer or in the form of a cheque.

    always confident

  • Thanks for the above answers.

    But I want to make the issue point specific.

    Is it mandatory for the bank to deduct TDS if the total interest is only less than 10,000/-(Section 194(A) mandated the threshold of 10,000/- Is it now changed?

    The depositor wants to get the TDS back. AS the bank has not quoted the PAN depositor asked the bank to rectify by quoting the PAN so that it can be claimed by filing a return.

  • Let's clear your few doubts before answering your question.
    1. Threshold limit of Rs. 10000 is for interest on savings bank stand not on RD and FD interest.
    So, the bank was right in deducting TDS on interest.

    2. Interest on RD is received in the 3rd year itself so they maut have deducted the same in the year of maturity and not before.

    3. Bank was correct in deducting TDS @20% as there was no PAN submitted.

    Now, you can claim refund of TDS only if the bank revises the TDS return and fills your PAN in the return. If they don't do so it will not reflect in your Form 26AS and hence claim for refund by filing ITR will not be possible.

    Also to add refund will be possible only if your income is below taxable threshold, meaning you will have to add this internet received as part of your income and then chexk the threshold limit of ?2.5 lakh. If the income exceeds the threshold limit after adding interest and claiming all deductions, them tax already deducted might get adjusted instead of refund.
    So this calculation is to be done at your end to arrive at exact refund.

    You need to give your PAN to bank and also them revise their quarterly TDS return and do not file return before getting the same corrected as the same will not reflect in your 26AS and your claim in return for refund will be rejected.

    Live before you leave.

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