Mistakenly Paid 5% TDS Instead of 2%? Here's How to Claim a Refund via TRACES

5% TDS (Tax Deducted at Source) instead of 2%, you're in luck because you can claim a refund for the excess amount through the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal. Here’s a step-by-step guide to help you claim the refund:

Step 1: Log in to TRACES Portal
Go to the official TRACES website: https://www.tdscpc.gov.in/

Log in using your User ID, Password, and Captcha.

Step 2: Access Your TDS Return
Once logged in, navigate to the "Request for Refund" section under "Taxpayer" options.

You’ll be able to see the details of your TDS payments and the Form 26AS reflecting your TDS payments.

Step 3: Check Form 26AS
Ensure that the excess TDS deduction (5% instead of 2%) is reflected in your Form 26AS.

Form 26AS is a consolidated tax statement that shows all the taxes that have been deducted and deposited by the deductor.

Cross-check the amount shown under the relevant assessment year and verify that it matches the excess amount you’ve paid.

Step 4: File a Correction Statement
If you’ve made an error while filing the TDS return, you’ll need to file a rectification statement.

In the TRACES portal, there is an option to file a rectification request. You’ll be required to upload the corrected TDS return showing the correct 2% deduction instead of 5%.

Step 5: Initiate Refund Request
After you’ve filed the rectified return, you can proceed to claim the refund for the excess TDS that has been deducted.

Under the “Request for Refund” section on TRACES, select the option to "Apply for Refund".

Fill in the necessary details and submit the application.

Step 6: Wait for Processing
The Income Tax Department will process your refund request. It may take some time for them to verify the claim and process the refund.

You can track the status of your refund request through the TRACES portal.

Step 7: Refund Credit
Once your refund request is approved, the amount will be credited to your bank account that is linked with your PAN.

Step 8: Follow-Up (If Needed)
If your refund request is not processed or there is a delay, you can raise an issue via the TRACES portal or contact the Income Tax Department through their helpdesk for clarification.

Common Issues You May Face:
Mismatch in details: Ensure that the details on the TDS return and Form 26AS are consistent.

Incorrect Bank Account Information: Make sure your bank account details are correct and linked to your PAN number for smooth processing of the refund.

Conclusion
To summarize, you’ll need to:

Login to TRACES.

Check the TDS payment details in Form 26AS.

File a correction statement if needed.

Apply for a refund via the portal.

This process helps ensure that your tax records are accurate and you get back the excess amount deducted.

If you need help with specific steps or run into any issues, feel free to ask!