Regarding TDS deduction by bank

[FinoGuy]

Any interest earned from savings account /FD : TDS @10%(20% if pan not linked) to be deducted by bank.
My doubt is, 1)can bank deduct TDS from fd account and not savings account(as this is main account) ?
2)can branch reverse such inadvertent deduction(in spite of 15g form submitted) on pointing out mistake
3)is there any timeperiod after deduction within which bank can reverse the amount? 4)what is process to get refund from bank (apart from filing ITR next year)

Full story below
I noticed that karnataka gramin bank / sbi has deducted tds amount at 20% rate(in pan linked accounts) from Atleast 15 people in my village. These villagers are farmers who keep their lifetime savings as FD.
I noticed that Branch has deducted interest from a random fd account.
For example.,
One individual has a savings account (main), then FD1(10k), FD2(2L), FD3(50k) etc.
Instead of deducting from main savings account, branch deducts TDS from FD1 account itself (20% of interest earned on SB acc+FD1+FD2+fd3).
Because of this there will be no passbook entry & the ill-informed village farmers won't come to know of any deduction..
as they're in nontaxable bracket, They do submit 15g/15h forms every time a new fd is made, (+ branch rules)
Recently I pointed out that interest credited by branch is less than actual earned in his fd.
When he enquired with branch he got to know that 2570rs deducted as tds 6 months ago.! It was deducted from a fd of 40k (interest earned 2k something).
Seeing this many people enquired & came to know that branch did same to many people..
Branch refusing to refund & blaming the "system" which has automatically deducted TDS & asking to file ITR.
Is there a way to get refund without filing ITR in next FY?

 

[Infiniti]

this is truly sad to know. Kudos to you for leading the initiative. in my view if the 15G has been submitted then the bank has no right to deduct TDS. the intention of 15G is precisely to avoid this i.e. tedious process for refunding TDS for non-taxable bracket. you should definitely flag this to the ombudsman as it could be a system-wide issue.

 

[CA Karan Agarwal]

Tds is generally deducted on FD's only. You will never see an entry in savings account. You can ask for form 16A from bank/interest certificate which will disclose tds deducted.

Generally banks don't deduct tds if 15g is submitted on time. If it's an error from bank then you can ask them to revise tds returns, however very thin chance of they revising tds returns if already filed.

Only way to get refund is filing itr.

 

[FinoGuy]

this is truly sad to know. Kudos to you for leading the initiative. in my view if the 15G has been submitted then the bank has no right to deduct TDS. the intention of 15G is precisely to avoid this i.e. tedious process for refunding TDS for non-taxable bracket. you should definitely flag this to the ombudsman as it could be a system-wide issue.

They would have deducted close to 2L like this from all accounts. Sad thing is people only see passbook entries & nobody sees fd statements as banks don't give it physically (they give only a fd bond).

 

[FinoGuy]

Tds is generally deducted on FD's only. You will never see an entry in savings account. You can ask for form 16A from bank/interest certificate which will disclose tds deducted.

Generally banks don't deduct tds if 15g is submitted on time. If it's an error from bank then you can ask them to revise tds returns, however very thin chance of they revising tds returns if already filed.

Only way to get refund is filing itr.

Within how much time can psu banks like sbi revise returns sir ?
Tds was deducted in last year 2021 oct-dec period. & some people hv deductions even in 2020 feb-aug(2yrs fd) .
Can they get refund as itr should've been filed before 31 July this year as timeline already over?

 

[Pradeepbansal]

Within hours much time can psu banks like sbi revise returns sir ?
Tds was deducted in last year 2021 oct-dec period. & some people hv deductions even in 2020 feb-aug(2yrs fd) .
Can they get refund as itr should've been filed before 31 July this year as timeline already over?

you should not get into all this. simply file a complaint with the bank and then to the respective RBI banking ombudsman. keep us informed here of what happens. its the bank's headache to get the funds back from IT department. if you have filed 15g forms and submitted in the branch, attach its proof and complaint against the bank at the earliest to RBI banking ombudsman.

also remember to file seperate complaint for each and every complainant. do not club these complaints. also try to file these complaints online and attach as many proof/documentary evidence as much as possible in favor of your claim.

Do it and keep us posted here.

 

[FinoGuy]

you should not get into all this. simply file a complaint with the bank and then to the respective RBI banking ombudsman. keep us informed here of what happens. its the bank's headache to get the funds back from IT department. if you have filed 15g forms and submitted in the branch, attach its proof and complaint against the bank at the earliest to RBI banking ombudsman.

also remember to file seperate complaint for each and every complainant. do not club these complaints. also try to file these complaints online and attach as many proof/documentary evidence as much as possible in favor of your claim.

Do it and keep us posted here.

Filed complaint with sbi & gramin bank (6 separate complaints who were willing). Sbi manager called & asked to give in writing declaring income not in taxable bracket, given, yesterday got call again & he told earlier they used to reverse but nowadays they can't reverse, he refused to refund. Wrt gramin bank there's no response (23 days so far) & they don't give acknowledgement after 15G submission, (they just write on fd bond with date of 15G submission) I guess that doesn't count as proof

 

[Pradeepbansal]

Filed complaint with sbi & gramin bank (6 separate complaints who were willing). Sbi manager called & asked to give in writing declaring income not in taxable bracket, given, yesterday got call again & he told earlier they used to reverse but nowadays they can't reverse, he refused to refund. Wrt gramin bank there's no response (23 days so far) & they don't give acknowledgement after 15G submission, (they just write on fd bond with date of 15G submission) I guess that doesn't count as proof

it counts as proof wherever they write. and if sbi is denying for reversal, take it in writing and then file complaint in rbi ombudsman. regarding gramin bank, wait for a week and then complaint to rbi ombudsman. keep in mind the above things which i wrote while filing complaint.

 

[Jatin1987]

Any interest earned from savings account /FD : TDS @10%(20% if pan not linked) to be deducted by bank.
My doubt is, 1)can bank deduct TDS from fd account and not savings account(as this is main account) ?
2)can branch reverse such inadvertent deduction(in spite of 15g form submitted) on pointing out mistake
3)is there any timeperiod after deduction within which bank can reverse the amount? 4)what is process to get refund from bank (apart from filing ITR next year)

Full story below
I noticed that karnataka gramin bank / sbi has deducted tds amount at 20% rate(in pan linked accounts) from Atleast 15 people in my village. These villagers are farmers who keep their lifetime savings as FD.
I noticed that Branch has deducted interest from a random fd account.
For example.,
One individual has a savings account (main), then FD1(10k), FD2(2L), FD3(50k) etc.
Instead of deducting from main savings account, branch deducts TDS from FD1 account itself (20% of interest earned on SB acc+FD1+FD2+fd3).
Because of this there will be no passbook entry & the ill-informed village farmers won't come to know of any deduction..
as they're in nontaxable bracket, They do submit 15g/15h forms every time a new fd is made, (+ branch rules)
Recently I pointed out that interest credited by branch is less than actual earned in his fd.
When he enquired with branch he got to know that 2570rs deducted as tds 6 months ago.! It was deducted from a fd of 40k (interest earned 2k something).
Seeing this many people enquired & came to know that branch did same to many people..
Branch refusing to refund & blaming the "system" which has automatically deducted TDS & asking to file ITR.
Is there a way to get refund without filing ITR in next FY?

1. As per the amount of FD in example given by you, No TDS will be deducted at all because annual interest will be under 40K per year (For Senior, it's 50K). So bank's System should not deduct any TDS from FD.

2. If TDS is required to be deducted, then it will be deducted only and only from FD account.

3. If you have any proof of submission of 15G/H for 2022-23 and if still TDS is deducted, then bank is liable to make the payment of anyone or both that is penalty imposed by Apelette Authority along with Interest on the Interest earned by client for the duration (deduction date to Refund Date).

4. If TDS is deducted by mistake or system or whatever the reason, bank can't reverse it as per IT compliance.

5. Bank won't be able to recall the Tax from IT deptt. So ITR filling will be the last option to get this as refund.

6. If your are liable to pay more tax in near future on other income then you can consider this tax as advance tax paid (only if bank deducted 10% by registering your PAN).

7. And the last thing is that the TDS amount which you are telling is very small amount and if you're going to take pain of complaints and all then very less chances are there where client will get any compensation because 99.99%, your client may not have the receipt of filling 15gh. And even if client have the receipt of 15gh submission then also very small percentage of interest will be given to client as compensation.

 

[rp0703]

1. As per the amount of FD in example given by you, No TDS will be deducted at all because annual interest will be under 40K per year (For Senior, it's 50K). So bank's System should not deduct any TDS from FD.

2. If TDS is required to be deducted, then it will be deducted only and only from FD account.

3. If you have any proof of submission of 15G/H for 2022-23 and if still TDS is deducted, then bank is liable to make the payment of anyone or both that is penalty imposed by Apelette Authority along with Interest on the Interest earned by client for the duration (deduction date to Refund Date).

4. If TDS is deducted by mistake or system or whatever the reason, bank can't reverse it as per IT compliance.

5. Bank won't be able to recall the Tax from IT deptt. So ITR filling will be the last option to get this as refund.

6. If your are liable to pay more tax in near future on other income then you can consider this tax as advance tax paid (only if bank deducted 10% by registering your PAN).

7. And the last thing is that the TDS amount which you are telling is very small amount and if you're going to take pain of complaints and all then very less chances are there where client will get any compensation because 99.99%, your client may not have the receipt of filling 15gh. And even if client have the receipt of 15gh submission then also very small percentage of interest will be given to client as compensation.

Also as mentioned in the post, in some cases TDS was deducted @20% i.e due to not having PAN. In that case even after filing return, there's no chance of getting refund of TDS deducted. Only choice is, bank to revise the TDS returns by mentioning PAN of the deductees and only after that TDS will be reflected in the 26AS.

 

[FinoGuy]

Also as mentioned in the post, in some cases TDS was deducted @20% i.e due to not having PAN. In that case even after filing return, there's no chance of getting refund of TDS deducted. Only choice is, bank to revise the TDS returns by mentioning PAN of the deductees and only after that TDS will be reflected in the 26AS.

Pan was given, still branch has deducted @20%

 

[rp0703]

Pan was given, still branch has deducted @20%

20% tds needs to be deducted when PAN is not given. May be you have given PAN but they have not updated it in the system. That's why 20% TDS is deducted. Only bank can tell why they have deducted that much TDS.

If pan is updated in system and they still deducted TDS @20% then that's just gross negligence on bank's part.

 

[FinoGuy]

20% tds needs to be deducted when PAN is not given. May be you have given PAN but they have not updated it in the system. That's why 20% TDS is deducted. Only bank can tell why they have deducted that much TDS.

If pan is updated in system and they still deducted TDS @20% then that's just gross negligence on bank's part.

Yeah, branch manager blaming "system" for deducting 20% in spite of pan linked status

 

[Copycat]

Within how much time can psu banks like sbi revise returns sir ?
Tds was deducted in last year 2021 oct-dec period. & some people hv deductions even in 2020 feb-aug(2yrs fd) .
Can they get refund as itr should've been filed before 31 July this year as timeline already over?

I doubt the bank will do anything
You need to talk to the AO for previous years. I'm not sure if the AO has the authority to waive off the penalty for late filing but I assume they should have that authority: https://cleartax.in/s/how-to-file-income-tax-return-for-last-years. Scroll to the middle of the article

 

[Jatin1987]

Also as mentioned in the post, in some cases TDS was deducted @20% i.e due to not having PAN. In that case even after filing return, there's no chance of getting refund of TDS deducted. Only choice is, bank to revise the TDS returns by mentioning PAN of the deductees and only after that TDS will be reflected in the 26AS.

bank can issue a letter confirming to client that TDS is deducted of that client and even bank can mention aadhar card no also.