Did your bank deduct tax from your fixed deposit interest? Or did the PF office cut TDS when you withdrew your provident fund money? If yes, you may be able to claim a refund by filing your Income Tax Return (ITR) correctly under either the old or new tax regime.

The refund is not automatic. It depends on your total taxable income, applicable deductions, and the final tax liability after filing. If the tax already deducted is higher than the final amount you owe, the excess can be refunded to your bank account.

Under the old tax regime, taxpayers can reduce taxable income using deductions such as Section 80C and Section 80D. This can help lower the final tax bill and increase the chance of a refund. FD interest and taxable PF withdrawal income must still be reported while filing the return.

Under the new tax regime, deductions are limited, but a refund is still possible if your total tax payable is lower than the TDS already deducted. The final outcome depends on the income shown in the return and the rebate or slab benefit available under the applicable rules.

To claim the refund, first log in to the income tax portal using your PAN-linked account. Then check Form 26AS and AIS to confirm whether the PF withdrawal TDS and FD interest TDS are correctly reflected. After that, choose the correct assessment year and select the old or new regime before filling in your income details.

Next, enter your salary, FD interest, PF withdrawal amount and any other taxable income. If you are filing under the old regime, add eligible deductions before submitting the return. Once the ITR is filed and verified, the tax department will process it and transfer any eligible refund directly to your linked bank account.

PF withdrawal may attract TDS if certain conditions are not met, especially when the withdrawal happens before the qualifying period. FD interest, on the other hand, is taxed under “Income from Other Sources,” and banks may deduct TDS if the amount crosses the prescribed limit.

To avoid problems, make sure your PAN is updated, your TDS entries match Form 26AS/AIS, and your bank account details are correct. Also, file the ITR before the deadline so you do not lose the chance to claim the refund.

For many salaried individuals and independent earners across India, the annual ritual of filing Income Tax Returns (ITR) often brings a sense of unease. While the goal is to comply with tax laws, a significant portion of taxpayers frequently find themselves paying more than necessary. Financial experts point out that this is rarely due to high income alone, but rather a result of hurried planning or a lack of clarity regarding the right tax regime and available deductions.

Navigating the Default Regime

As of May 2026, the New Tax Regime remains the default option for all taxpayers. Unless an individual explicitly opts for the Old Tax Regime during the filing process, the income tax department will automatically calculate their liability under the new structure. While the new system offers lower tax rates and simplifies compliance by removing the need for extensive investment documentation, it largely excludes traditional exemptions.

"The choice between the two regimes is not one-size-fits-all," notes a tax consultant familiar with current filing trends. "Taxpayers must assess whether their specific investment portfolio—such as housing loans, health insurance, or specific savings schemes—justifies sticking with the Old Tax Regime, where these deductions still hold significant value".

Common Mistakes Costing Money

Ground-level reports from this filing season highlight several recurring errors that inflate tax liability. A primary issue remains the failure to reconcile personal income data with the Annual Information Statement (AIS) and Form 26AS. "When a taxpayer manually enters figures that don't match the bank or broker-reported data in the AIS, it immediately triggers automated queries from the tax department, leading to delays and potential penalties," explains one advisor.

Other frequent oversights include:

• Selecting the incorrect ITR form for one's specific income type.

• Failing to claim deductions like HRA or LTA despite being eligible.

• Omitting interest income from FDs or savings accounts, leading to later scrutiny.

• Neglecting to e-verify the return after submission, which renders the entire filing incomplete.

Smart Planning Saves Tax

Strategic tax planning is most effective when initiated early in the financial year, rather than as a last-minute scramble. Taxpayers can often optimize their liability by leveraging specific sections of the Income Tax Act. For instance, combining the Section 80C limit of ₹1.5 lakh—which includes ELSS, PF, and home loan principal—with the additional ₹50,000 exemption available through the National Pension System (NPS) provides a substantial cushion.

Health insurance also plays a dual role, offering both essential financial protection and tax benefits under Section 80D. Premiums paid for self, family, and parents can lead to significant deductions, effectively reducing taxable income. By systematically mapping these investments against the projected annual income, individuals can move away from reactive tax paying and toward a more efficient financial standing.