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ITR filing FY 2024-25: Do you need to file your income tax return if TDS has been deducted? Explained
Tax Deducted at Source or TDS is the tax that is deducted before making a payment to the recipient. (AI image)
ITR filing FY 2024-25: It's that time of the year when every taxpayer gets together documents to file their income tax return. This year the last date of file the income tax return has been extended from July 31 to September 15, 2025.
One common query in the minds of taxpayers is - if TDS or Tax Deducted At Source has been cut, is there a need to file the income tax return? The clear answer to that is - yes, it is necessary for you to file your ITR.
Tax Deducted at Source or TDS is the tax that is deducted before making a payment to the recipient. The government collects a specified percentage of tax directly from various income sources such as salary, interest earnings or rental payments.
The tax amount is withheld before the recipient receives the payment, and the deducted sum is subsequently transferred to the government.
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Amarpal Chadha, Tax Partner, EY India elaborates, 'Many taxpayers believe that if TDS has already been deducted from their income, or if their employer has issued a Form 16, their compliance obligations are complete and filing an Income Tax Return is not required. However, this is a common misconception.'
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'TDS, Form 16, or Form 26AS do not confirm that the overall tax liability has been correctly computed and discharged. TDS is often deducted at a prescribed rate, which may not match the actual tax liability. Moreover, it does not exempt an individual from the obligation to file an ITR,' Amarpal Chadha tells TOI.
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The most important thing to understand here is that filing an ITR is mandatory if one's total income, before claiming certain deductions or exemptions, exceeds the basic exemption limit, or if specific conditions under the Income Tax Act are met, like having foreign income or assets, or have undertaken high-value transactions (like expense towards foreign travel, deposits into savings account exceeding a specified amount, etc).
'Additionally, the law also mandates filing of income tax return if the aggregate of TDS and tax collected at source exceeds the specified limit,' he says.
'It is also essential to file an ITR in cases where one is seeking a refund of excess TDS, intends to carry forward losses, etc,' Chadha concludes.
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