Can NRIs Get Full TDS Refunds?

One thing to keep in mind is that a large TDS deduction does not automatically mean the entire amount will be refunded.

The final refund depends on the tax liability calculated in the ITR. If your final tax liability is ₹1.5 lakh and you have eligible TDS credit of ₹5 lakh, the potential refund would generally be the excess ₹3.5 lakh, subject to processing and any other adjustments.

This can be particularly relevant to NRI property transactions because the TDS withheld can be substantial compared with the eventual tax liability.

I would also make sure the bank account intended to receive the refund is properly validated and nominated on the e-Filing portal. The portal allows taxpayers to add, validate and nominate a bank account for receiving refunds, including an NRO account.

I would first reconcile the TDS before filing the return.

Check your Form 26AS and AIS against the TDS certificates and payment records. The Income Tax Department says Form 26AS contains TDS/TCS information and also provides a tax-credit mismatch facility where the reported credit does not match the available records.

For example, if ₹5 lakh was actually deducted but only ₹4 lakh is reflected as eligible tax credit, you shouldn't simply claim ₹5 lakh without resolving the discrepancy.

The deductor may need to correct its TDS statement if the tax credit has been reported incorrectly.

Yes, an NRI can receive a TDS refund if the tax deducted is more than the person's final tax liability.

The important point is that TDS is not necessarily the final tax payable. When you file your ITR, your total income and applicable tax are calculated. If the eligible taxes already paid, including TDS, exceed the final liability, the difference can become a refund.

The Income Tax Department describes a refund as an amount returned when taxes paid through TDS, TCS, advance tax or self-assessment tax exceed the actual tax due.

So being an NRI does not by itself prevent you from receiving a refund.