TDS, or tax deducted at source, is made 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 is less than The tax they have already paid through TDS. Income Tax (IT) Rules state that if the due date for filing Income Tax Return (ITR) is over, the taxpayer cannot claim TDS refund.
However, there are some exceptions. The IT Act provides a window under section 119(2)(b) to claim TDS refund, exemption, deduction or any other relief under the Act. This section empowers the Central Board of Direct Taxes (CBDT) to direct Income Tax authorities to allow any such claim even after all the deadlines for filing ITR have expired. However, such claims will be allowed only if the non-compliance has caused genuine hardship to the taxpayer.
In view of the powers of section 119, circular no. was issued by CBDT on 9/2015 which laid down the guidelines and ceiling limits for various authorities for considering the refund claim. As per the circular, the powers of acceptance or rejection of claims are delegated to the Principal Commissioners or Commissioners of Income Tax, when the claim amount is up to 10 lakh for an assessment year. Similarly, the Principal Chief Commissioner of Income Tax has been entrusted with the powers to consider claims between from 10 lakhs 50 lakhs. CBDT will consider the above claim only 50 lakhs.
Any taxpayer, whether individual, company, trust, HUF, etc. to whom PAN has been issued and fulfills the above conditions, can file a claim.
The taxpayer can exercise this provision and file a claim in case of overpayment of income tax, if the eligible loss was not carried forward, or if the court passes an order in favor of the taxpayer. Additional tax payment arises in a scenario where it is paid on exempted income, or qualified deduction is not claimed at the time of filing ITR. Taxpayers can also claim TDS deducted under section 119 even if they have not filed ITR as their taxable income did not exceed the basic exemption limit. 2.5 lakh ( 3 lakh for senior citizens).
Let us understand it with an example. Suppose, A is a senior citizen and his tax was deducted on interest received from fixed deposit. Due to ill health he could not file ITR on time and missed all the deadlines. In this scenario, A can file a claim for TDS refund before the concerned authorities.
In other words, under this section, a taxpayer can apply for any benefit of the IT Act which is available but could not be availed due to some unavoidable circumstances.
How to file a claim
The taxpayer is required to prepare a manual application addressed to the authorities of the concerned jurisdiction. There is no prescribed format of application. However, it is a condonation request by the taxpayer to allow filing of claim and ITR after the due dates. The application should describe the circumstances due to which she could not comply in time due to ‘actual difficulty’. The application should contain relevant evidence to support the reason for not filing ITR within the due date.
If further information is required on the matter, notice will be issued by the taxpayer to the taxpayer. The details of such notices issued will be available under the ‘Pending Action’ tab of the Income Tax Portal. If the application is approved, the ITR under section 119(2) will have to be filed online 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 the facility of filing a claim through an online ‘Women 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 updated on the portal yet.
time limit
Condonation of claims for any assessment year can be filed up to six years from the end of the relevant assessment year. For example, if a personnel of the Indian Armed Forces has paid tax on exempted disability pension received for assessment year 2020-21, then the additional tax paid can be claimed up to assessment year 2026-27 i.e. up to 31 March 2027. can be filed.
Only Sonecha is a partner in Sonecha and Amalani.
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