TDS Refund & ITR Filing Guide 2025: Process, Status Check, and Claim Steps

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October 3, 2025
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TDS Refund & ITR Filing Guide 2025: Process, Status Check, and Claim Steps

TDS Refund (Tax Deducted at Source Refund) is provided when the tax deducted throughout the year is higher than your actual tax liability. In such cases, you can get the extra tax back by filing your Income Tax Return (ITR). For this to happen smoothly, it is essential to file your ITR on time, provide correct bank details, and complete the mandatory e-verification. Once the process is successfully completed, the refund is directly credited to your registered bank account.

If too much tax was deducted from your Salary, Interest income, Rent, or Professional Fees, there is no need to worry. The Income Tax Department ensures this surplus amount is returned to you. This is specifically known as a TDS Refund. However, claiming this amount is only possible when you file your Income Tax Return within the stipulated deadline. During the return filing process, you need to declare your total Income, calculate the tax due on it, and then adjust the previously deducted TDS amount. If the tax you owe is less than the TDS already cut, the remaining surplus amount is transferred back into your account as a refund.

ITR Refund vs. TDS Refund: Why Taxpayers Get Confused

Whenever the terms ITR Refund and TDS Refund come up, even people who have been filing their ITR for years can get confused. For most taxpayers, an ITR Refund largely means a TDS Refund. Only a smaller group of people who pay Advance Tax are those who claim a refund on that amount.

What Exactly is a TDS Refund?

A TDS Refund is the amount that the Government returns to you when the tax deducted throughout the financial year exceeds your actual tax payable. To figure this out, your total income is calculated according to the applicable Tax Slab, and this is matched against the TDS that has already been deducted.

Understanding with an Example

Suppose a taxpayer named Raj earned a salary of ₹9,00,000 and interest income of ₹50,000 in the Financial Year 2024-25. The total TDS deducted on this income was ₹1,01,000. However, when Raj filed his ITR, his actual final tax liability was only ₹39,000. This means Raj is eligible to receive a TDS Refund of ₹62,000 ($1,01,000 – $39, 000$ ).

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When and How to Claim Your TDS Refund

A TDS Refund can only be claimed once a year, and that too, only during the process of ITR Filing. Whether a bank has deducted tax on your Fixed Deposit (FD) interest or if excess tax was deducted during your job, all such adjustments are made when you file your ITR.

Steps to Claim a TDS Refund

It is absolutely crucial to file your ITR on time. Ensure your bank details, including the IFSC Code and Account Number, are accurately entered. Do not forget to complete the essential step of e-verification. Your refund cannot be processed and approved without completing these necessary steps.

Cases Where a TDS Refund Arises

A TDS Refund typically arises in the following situations:

When the employer deducts excess tax from the salary.
When a bank wrongly deducts tax on Fixed Deposit (FD) interest.
In the case of Senior Citizens, where tax deduction exceeds the applicable interest limit.
If double tax is deducted because PAN and Aadhaar are not linked.

Online Process to Claim the Refund

Log in to the official Income Tax website.
Fill in the relevant ITR Form.
After submitting the form, perform the e-Verify action.
E-verification can be done using a Digital Signature, Aadhaar OTP, or Net Banking.

ITR Refund Processing Time and Status Check

According to former Chief Commissioner of Income Tax, Ramkrishna Srinivasan, refunds for ITR-1 forms are generally processed first. This is followed by ITR-2 and then ITR-3. Essentially, as the ITR form becomes more complex, the refund processing time often increases. However, if you filed your ITR very close to or on the final deadline, the refund may take longer. Refunds for ITR-2 and ITR-3, provided there are no defects or issues, can take a few months to be credited.

How to Check Your Refund Status

With the last date for filing now gone, many people are keenly waiting for their ITR Refund. The question is, when will the refund arrive? There is no fixed date, but the good news is that you can easily check your refund status yourself on the Income Tax official website. Here is how:

First, go to the E-Filing Portal: To know your refund status, you must first visit the Income Tax e-filing portal.
Log in with ID and Password: Log in to the portal using your ID (PAN) and password. You will also need to enter a Captcha code here.
Navigate to Your Returns: In the next step, go to the e-File tab, and under Income Tax Returns, click on View Filed Returns.
Check Refund Status: Click on View Details. Here you will be able to see your refund status and also view the entire lifecycle of your ITR.

Refund Failure and Reissue Process

Interest on Delayed Refund

If the Income Tax Department fails to issue your refund within the stipulated time, they are legally bound to pay you 6% simple annual interest (Section 244A). This interest is credited to your bank account along with your refund amount.

What to Do if Your Refund Fails?

Sometimes, a refund can fail even when the taxpayer has made no error. In such a scenario, you should first check the refund status on the e-filing portal. If the status shows that the refund has failed, you can submit a Reissue Request.

Reasons for Refund Failure

A refund can fail due to several reasons:

Incorrect bank account number entered.
Errors in the IFSC Code.
The bank account is not validated on the portal.
Mismatch in the name on PAN and the bank account.
PAN and Aadhaar not being linked.

The Importance of PAN-Aadhaar Linking

Linking your PAN and Aadhaar is mandatory nowadays. If this linking is incomplete, your refund may be stuck. In such a case, link your PAN-Aadhaar first, and then submit the Refund Reissue Request.

Complete Process for Refund Reissue Request

If your refund is stuck, you can easily submit a Reissue Request on the Income Tax Department’s website by following these steps:

First, log in to the e-Filing Portal.
Go to Services and select Refund Reissue.
Click on Create Refund Reissue request.
Now, select the record for which you want to submit the request.
Choose the bank account where you want the refund credited. If the account is not validated, you must validate it first.
Click on Proceed to Verification.
Complete the e-verification using Aadhaar OTP, EVC, or DSC.
Click on Continue, and your request will be successfully submitted.

How Long Does the Refund Take to Be Credited?

As per the Income Tax Department’s website, the refund generally takes about 4–5 weeks to arrive. However, this only happens if you have not just filed your ITR but have also successfully e-verified it. A refund cannot be issued without e-verification.

Conclusion

A TDS Refund is crucial for every taxpayer as it is your hard-earned money that was deducted in excess. If you file your ITR on time and complete the essential e-verification, the refund will be credited to your account without any problems. Remember, getting this benefit hinges entirely on accurate details and timely filing.

Frequently Asked Questions (FAQs)

Q: What is the main reason for an ITR Refund?

A: For most Indian taxpayers, the main reason for an ITR Refund is that the TDS (Tax Deducted at Source) during the year was higher than their actual tax liability calculated after filing the ITR.

Q: How can I claim my TDS Refund?

A: You can claim your TDS Refund only by correctly and timely filing your Income Tax Return (ITR), ensuring accurate bank details, and completing the mandatory e-verification of the return.

Q: What should I do if my ITR Refund fails to credit?

A: If your refund fails, you should log in to the e-filing portal, check the status, and submit a ‘Refund Reissue Request’ after updating or validating the correct bank account details.

Q: Will I get interest if the Income Tax Department delays my refund?

A: Yes, if the Income Tax Department delays your refund beyond the legally specified time, you are entitled to receive 6% simple annual interest on the refund amount under Section 244A.