INTEREST ON INCOME TAX REFUND

 An assessee is entitled to a REFUND of incomes taxes paid when the total income tax paid (By way of Advance Tax, Self-assessment tax, TDS, or TCS) is more than the amount of income tax payable in relation to his Total Income. Assessee is required to file his Return of Income within the due dates provided under the act to claim the refund.

 

The assessee shall also receive the INTEREST along with refund. The table below summarises the Interest rate and period for which such interest is payable 

PARTICULARS	RATE OF INTEREST	PERIOD
Refund arising out of > Advance Tax > TDS > TCS	0.5% per month or part of a month	If the return is filed within the due date :From 1st April of the relevant Assessment Year to the date of refund.   When the return is filed after the due date: From the date of furnishing the return to the date of refund.
Refund is out of Self-assessement tax paid	0.5% per month or part of a month	From the date of payment of tax or filing of Income Tax Return Whichever is later to the date of refund.
Other cases	0.5% per month or part of a month	From the date of payment of tax to the date on which refund is granted.
Refunds related to orders on appeal	3.00% per annum	On Expiry of 3 months from the date of Order to the date on which refund is granted.

 

 

-        No interest is payable if the amount of refund is less than 10% of tax determined.

 

-        No Interest is payable on the refund if the delay in processing the refund is attibutable to the assessee.

 

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CA Ramakrishna Sanjay