Ref: Circular NO. 2/2011 [F.NO. 385/25/2010-IT(B)], DATED 27-4-2011 of Central Board of Direct Taxes (CBDT) on refund procedure for excess tax deducted at source (TDS) on payments to residents.
The new Circular is applicable for refunds pertaining to the period up to 31 March 2010. The procedure for refunds for the period from 1 April 2010 is governed by a specific provision in the Indian Tax Laws dealing with centralized processing of quarterly TDS statements. The refund for the period after 1 April 2010 will be granted based on data furnished in the statements, subject to rectification of apparent inconsistencies, without the requirement of a separate claim for refund.
Under the new Circular, claim for refund of excess TDS needs to be made within a period of two years from the end of the financial year (FY) in which the tax was deductible at source. This effectively meant that the claim for refund can be made only for FY 2009-10 on or before 31 March 2012.
The CBDT has now issued another Circular No. 6/2011 dated 24 August 2011 modifying the new Circular. The modification provides that the refund claims pertaining to the period up to FY 2008-09 may be furnished up to 31 December 2012.
The modification provides an opportunity for taxpayers who have refund claims for earlier periods to put up their claims by 31 December 2012.
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