Get a tax refund on PF withdrawals and FD interest:Step-by-step process of filing ITR under both old new income tax regimes

Did your bank cut tax from your Fixed Deposit (FD) interest? Or did the PF office deduct Tax Deducted At Source (TDS) or simply tax when you withdrew your Provident Fund (PF) money? If yes, and you want the government to refund these two types of already deducted taxes from your salary, then, you have arrived at the right article. Lets find out how to claim tax deduction benefits against the TDS levied on PF withdrawal and interest earned on FD under the both old and new income tax regimes. Old Income Tax Regime Under the Old Tax Regime, the basic tax-free limit is ₹2.5 lakh. You will get refund of tax levied on FD interest and of TDS deducted on PF withdrawals under the Old Tax Regime if your actual income tax liability is up to ₹5.50 lakh. How to Claim Tax Benefits Under Old Income Tax Regime To get your money back, follow these steps: Step 1: Maximize Old Regime Deductions: Use traditional tax-saving options like Section 80C (PPF, LIC, ELSS) and Section 80D (Health Insurance) to lower your taxable income as much as possible. Step 2: Check Form 26AS / AIS: Log into the official Income Tax portal. Check your Form 26AS or Annual Information Statement (AIS) to ensure the TDS cut by the PF office and tax cut on FD interest are showing up correctly. Step 3: File Your ITR: When filing your Income Tax Return (ITR), opt for the Old Tax Regime. Report your total income (including the PF withdrawal and FD interest) and input the details. Step 4: Receive Your Money: The income tax website will automatically calculate your final position. The entire TDS amount and tax levied on FD interest will be transferred directly into your linked bank account as a refund. New Income Tax Regime Under the New Tax Regime, the basic tax-free limit is ₹4.0 lakh. You will get refund of tax levied on FD interest and of TDS deducted on PF withdrawals under the New Tax Regime if your actual income tax liability is up to ₹12.75 lakh. How to Claim Tax Benefits Under New Income Tax Regime When you file your ITR, here is what happens: Step 1: You add your PF withdrawal amount and FD interest to your total salary. Step 2: If that total combined income is still under ₹12.75 lakh, your final tax bill is ₹0 because of the Section 87A rebate. Step 3: Because your actual tax bill is zero, but the PF office already cut 10% of your money as advance tax, you will get the refund. The Result: When you file your ITR, the tax department will see that you owe ₹0 tax but have already paid TDS. They will process a 100% refund of that TDS money directly into your bank account. Difference between Total Actual Tax Liability Think of total tax liability as your total food bill at a restaurant. Think of TDS as an advance token you already paid at the entry gate. Actual tax liability is the final balance amount. If your advance token (TDS) was bigger than your food bill, the restaurant (the government) owes you a refund! How to Calculate These 2 Different Types of Taxes 1. How to Calculate Total Tax Liability? Step 1: Add up all your income for the year (Salary + FD Interest + PF withdrawal income, if taxable). Step 2: Subtract your tax-saving investments (like LIC premium, PF investment, or health insurance premiums under sections like 80C and 80D). This gives your ‘Net Taxable Income.’ Step 3: Calculate ‘Net Taxable Income’ based on applicable tax rate rate according to which slab you fall into. 2. How to Calculate Actual Tax Liability? Conditions: Eligibility Criteria: You can claim a refund of the TDS deducted on your PF and FD interest if you meet these conditions: The government levies 10% TDS on PF withdrawal amount if the subscriber pulls out ₹30,000 or more before five years of experience in his first job. How to Avoid Paying TDS On PF Withdrawal FD Interest From Next Year? Albeit, the subscriber can escape levy of TDS on his PF withdrawal if the following conditions are met: (i) Has submitted PAN and Form 15G/15H before the end of the relevant fiscal (ii) His actual income tax liability is zero ‘EEE’ Benefit The Provident Fund is famous for its EEE (Exempt-Exempt-Exempt) status, but this only applies in case of following cases: Investment Amount: The money you contribute monthly in EPF account is exempt from tax under Section 80C (up to ₹1.5 lakh per year). Interest Earned: The interest you earn is tax-free, provided your annual contribution does not exceed ₹1.5 lakh. Withdrawal Amount: As mentioned, if you withdraw after 5 years, the entire amount (Principal + Interest) is tax-free.