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Getting your refund for higher tax deducted at source
April, 17th 2014

Arnav Pandya

There are a lot of occasions when salaried individuals find that the tax that has been deducted by the employer is different from what has actually to be paid. While a lower tax deduction can happen if some additional income like fixed deposit interest has not been mentioned in the list of income earned by the individual there is also another danger that is present. This is that the employer ends up deducting more tax than what is actually required and this happens due to the fact that some deductions that are actually available to the individual have not been considered in the working. Here are several points related to this kind of position and how the individual should tackle it.

Employer action
The initial action that has been undertaken is by the employer since the income is being received as salary from the employer and based upon the amount received here there is some tax that is deducted at source. The important thing is for the employer to consider all the income and all the deductions that can be availed by the individual so that the right amount of tax is actually deducted. There can be times when the tax that is deducted is more either because some of the deductions are not considered by the employer or it could be that the employee has taken some steps at the end of the financial year by which time the period for claiming the deductions were already over and hence there could not be anything done about it. This is the starting point of the entire process and once this is visible then additional action would need to be taken.

No recovery from employer
The employee has to understand that the employer deducts the tax from the employee and then deposits this with the government so the employer does not hold on to the taxes that have been deducted. This is vital as the process of refund of the excess amount that is deducted would not have to be conducted with the employer but with the government. One also ha to distinguish a situation where there is a higher deduction in the initial months of the year but then the employee shows the employer that some additional investment or other action has been taken which would ensure that there is a chance of an adjustment in the amount of taxes that is deducted in the last few months of the year. This is different from a situation where the financial year is over and the tax has been deducted with nothing more to be done about it with the employer.

Income tax return
The entire process then shifts to the time of the filing of the income tax return as this is the period when the individual will be able to act to get a refund of the tax that has been deducted in excess. At the time of the filing of the tax return the details of the actual income and the actual deductions should be given which will give rise to the new working with the new tax to be paid. This will be the adjusted amount and hence there will be an excess tax that is shown as being paid. This will give rise to the refund demand and this should be clearly claimed in the income tax return so when the assessment is made then the government will consider the claim and award it if the details are proper. This will take some time as there will be some months that pass before the refund actually comes in but the individual will have to wait because there is no other way to go about the process.

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