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Find out exactly how much TDS refund you're owed — and how much interest — under Section 437 of the new Income-tax Act, 2025. Free, instant calculation.
A TDS refund calculator tells you how much money the Income Tax Department owes you back when the tax deducted at source (TDS) from your salary, freelance payments, or bank interest is more than your actual tax liability for the year. It also works out the interest you're entitled to for the delay. Use it if an employer, client, or bank deducted more TDS than your final tax bill turned out to be — salaried employees, freelancers, NRIs, and traders run into this every filing season.
TDS refund arises whenever your total TDS exceeds your final tax liability. The excess amount is refunded along with simple interest, governed by Section 437 of the Income-tax Act, 2025 (in force from 1 April 2026, replacing Section 244A of the old 1961 Act).
Refund Principal = Total TDS Deducted − Actual Tax Liability
Interest = Refund Principal × 0.5% × Number of months (or part-months)
Total Refund Payable = Refund Principal + InterestInterest runs from 1st April of the Tax Year (if you filed your ITR on or before the due date) — or from your actual filing date (if filed late) — until the date the refund is credited. Any part of a month counts as a full month. No interest is paid if the refund is less than 10% of your assessed tax liability.
Priya, a salaried professional, had ₹85,000 deducted as TDS by her employer for Tax Year 2026-27. After computing deductions under the new tax regime, her actual tax liability works out to ₹62,000. She filed her ITR on 20th July 2026 — before the due date of 31st July 2026. Her refund was credited on 15th November 2026.
The Income-tax Act, 2025 took over from the Income-tax Act, 1961 on 1st April 2026. Refund and interest rules moved from Section 244A to Sections 431–438, with Section 437 covering interest on refunds. The 0.5% per month (6% per annum) interest rate is unchanged from the old law — only the section numbers and drafting have been simplified. If your refund relates to income earned before 1st April 2026 (FY 2025-26 / AY 2026-27), the old Section 244A of the 1961 Act still applies to that assessment. For FY 2025-26 filings, also keep the old vs new tax regime choice in mind, since it directly changes your final tax liability and therefore your refund amount.
Most refunds are processed within 4–6 weeks of e-verifying your ITR, though CPC has been processing many returns faster. Delays beyond this window are usually when interest under Section 437 starts becoming meaningful.
Yes. Interest received on your TDS refund is taxable as "Income from Other Sources" in the financial year you receive it, and must be declared in that year's ITR.
No interest is payable in that case under Section 437, regardless of how long the refund takes to process.
No. A refund claim can only be made by filing your income tax return for the relevant Tax Year — there's no separate refund application process.
Differences usually come from rounding rules the department applies, adjustments against past tax demands, or a mismatch between your claimed TDS and what's reflected in Form 26AS/AIS.
No. If the Assessing Officer determines the delay was caused by you — e.g., not responding to a notice or not validating your bank account — that period is excluded from interest calculation.
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