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Budget Insights

Union Budget 2022 New Guidelines on Refund of Wrong TDS

Deepshikha Nainani Posted on July 03, 2025

Table of Contents

The Union Budget 2022 was presented on 1st February, 2022. Among the different announcements made during the presentation, the process of getting a refund on wrongly deducted tax at source (TDS) and filing of revised/updated returns was also introduced. Let us examine what this process is and what are its benefits.

Current Situation

Before understanding the newly proposed concept, let us first take a look at the current process. As of now, the due date for filing returns for a financial year is 31st July (for individual taxpayers) or 31st October (for corporate taxed entities) of the following financial year: depending on the taxpayer category.

In case you miss the corresponding deadline, you can file a ‘belated return’ latest by 31st December of the same year. This gives an individual taxpayer a maximum period of just 5 months (from 31st July to 31st December) to file the belated IT return or an updated one in case any mistakes were spotted in the return originally filed. One of these mistakes is ‘wrongly deducted TDS’.

In such a case, the current process to file for a refund (as defined under section 248) is an arduous one.

New Guidelines

As of budget 2022 for the new financial year, beginning 1st April 2022, a provision has been made to give taxpayers up to 2 yrs (from the original date of filing) to submit a revised return and conveniently appeal for a refund, as and when applicable.

The appeal for refund can now be made directly to an assessing officer, with an escalation matrix that leads to a deputy commissioner and finally the tax commissioner, in the same order. This is likely to be further defined under a new section of the Income Tax Act: Section 239 A.

Benefits

One of the most common situations in which a TDS refund is sought is for transactions involving non-resident Indians. For example, when paying house rent to an NRI landlord, the rule states that 31.2% TDS is to be deducted from the rent amount and filed with the government. However, this is only applicable if the NRI’s income in India falls under the taxable bracket. If not, then the NRI can produce a certificate and appeal for a refund under the new and convenient process.

Hi! I’m Deepshikha Nainani

Blogger

Deepshikha is a marketing and communications expert with over a decade of experience across various industries. With expertise in performance content, digital campaigns and brand management, she excels in creating data-driven, creative solutions that drive growth and engagement. Holding certifications in digital marketing and content strategy, she is passionate about combining creativity with analytics to create compelling marketing narratives that resonate. During her downtime, Deepshikha enjoys watching films and documentaries, listening to music, cooking and traveling.