How to claim TDS refunds if you’ve missed filing ITR

 



The IT law provides a window under section 119(2)(b) to claim a TDS refund.

TDS, or tax deducted at source, is done at the time of making certain payments, such as interest on bank deposits, salary, rent, etc, which can be claimed as refund by taxpayers if their final tax liability comes to be lower than the tax they have already paid through TDS. The Income Tax (IT) rules say that if the due date to file the Income Tax Return (ITR) has lapsed, taxpayers cannot claim a TDS refund.

However, there are certain exceptions. The IT law provides a window under section 119(2)(b) to claim a TDS refund, exemption, deduction or any other relief under the Act. The section empowers Central Board of Direct Taxes (CBDT) to direct income tax authorities to allow any such claim even after the expiry of all the time limits to file the ITR. However, such claims will be allowed only if the non-compliance was because the taxpayer faced genuine hardship.

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However, there are certain exceptions. The IT law provides a window under section 119(2)(b) to claim a TDS refund, exemption, deduction or any other relief under the Act. The section empowers Central Board of Direct Taxes (CBDT) to direct income tax authorities to allow any such claim even after the expiry of all the time limits to file the ITR. However, such claims will be allowed only if the non-compliance was because the taxpayer faced genuine hardship.

Any taxpayer, whether an individual, company, trust, HUF, etc. to whom PAN is issued and fulfils the above-mentioned conditions can file a claim.

The taxpayer can exercise this provision and file a claim in case of excess payment of income tax, if the eligible loss was not carried forward, or in case the court issues any orders in favour of the taxpayer. The excess tax payment arises in a scenario where it is paid on exempt income, or the eligible deduction is not claimed at the time of filing ITR. Taxpayers can also file a claim on deducted TDS under section 119 even if they didn’t file ITR as their taxable income did not exceed the basic exemption limit of ₹2.5 lakh ( ₹3 lakh for senior citizens).

Let us understand this with an example. Suppose, A is a senior citizen and his tax was deducted on interest received from fixed deposits. He couldn’t file ITR on time due to poor health conditions, and missed all the deadlines. In this scenario, A can file a claim for a TDS refund before the relevant authorities.

In other words, under this section, a taxpayer can apply for any benefit of the IT law that is available but couldn’t be availed due to some unavoidable circumstances.

How to file a claim

The taxpayer is required to prepare a manual application addressing the relevant jurisdictional authorities. There is no prescribed format of application. However, it is a condonation request by the taxpayer to allow the filing of claim and ITR after the due dates. The application should describe the circumstances due to which she could not make timely compliance because of ‘genuine hardship’. The application should have relevant evidence to support the reason for not filing ITR within the due date.

If further information will be required on the matter, then a notice will be issued to the taxpayer by the taxman. The details of such notice issued will be available under the ‘pending actions’ tab of the Income Tax portal. If the application is approved, the ITR will have to be filed online under section 119(2) in the ‘e-filing’ tab of the Income Tax Portal. If the application is rejected, the taxpayer can file a writ petition before the High Court.

The Income Tax portal also provides a facility for filing a claim through an online ‘condonation request’ available under the ‘Services’ tab of the portal. As per the user manual, the taxpayer is required to select the ‘Allow ITR filing after time-barred’ tab after selecting the ‘condonation request’ tab. However, that tab is not yet updated on the portal.

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Time limit

Condonation for claims for any assessment year can be filed up to six years from the end of the relevant assessment year. For instance, if a personnel of the Indian Armed Forces, paid tax on exempt disability pension received for the assessment year 2020-21, then the claim for excess tax paid can be filed till AY 2026-27 i.e. by 31 March 2027.

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