Tally for CAs in Industry Silver Edition (Single User) Tally Renewal (Auditor Edition) Need Tally for Clients? (Tie-up with us!!!)
Open DEMAT Account with in 24 Hrs and start investing now!
Direct Tax »
Open DEMAT Account in 24 hrs
 Notification No. 49/2021 Central Board Of Direct Taxes
 Know the Cons of Pre-Filled Income Tax Return
 5 cash transactions that can attract I-T notice Income tax
 Direct Taxes Committee of ICAI enters into an arrangement with Taxmann Allied Services Private Limited w.r.t Virtual Books- Income-tax Act as amended by Finance Act, 2021
 Income Tax Return or ITR for FY20 Can Be Filed Till May 31. Know Details
 Notification No. 38/2021 Central Board Of Direct Taxes
 CBDT notifies Conditions for Pension Fund for Exemption under Sec 10(23FE) and substitutes Form No. 10BBA
 Received tax refund without interest? These could be the reasons
 How TDS provision applies on rent paid Income Tax
  What are the restrictions on cash transactions under income tax rules?
 CBDT directs banks to report taxpayers interest income
 Who is eligible to file this income tax return form? ITR Sahaj Form
 How is capital gains tax calculated with reference to selling of land? Your Queries (Income Tax)
 New income tax return forms notified: Here s your guide to choosing the right ITR
 Notification No. 32/2021 Central Board Of Direct Taxes

Received tax refund without interest? These could be the reasons
April, 29th 2021

If ITR is furnished by the assessee on or before the due date, then interest shall be payable from April 1 of the Assessment Year to the date on which the refund is generated.

Many taxpayers who have received their income tax refund are saying that they have not received any interest on the refund amount whereas a taxpayer is eligible to receive interest on refunds. However, tax experts say that although one is eligible to receive interest on tax refunds, all refunds are not eligible for interest. Let us understand when a taxpayer may not receive interest on a refund.

When can you claim a refund?

When the tax liability of an assessee in a particular financial year is less than the actual tax paid by way of tax deducted at source (TDS), tax collected at source (TCS), advance tax or self-assessment tax, then he is eligible for refunds. This refund can be claimed by filing an income tax return within the due date. The tax department then issues refund after processing the ITR.

Along with the refund the I-T Department also gives interest to eligible taxpayers. "The interest will be calculated at the rate of 0.5% for every month or part of month starting from the first month (April) of the assessment year," says CA Mansi Gupta.

However, this refund is paid provided two conditions are met. First, the ITR must be furnished by the assessee on or before the due date. Second, the refund amount must be more than 10% of the actual tax liability as determined in the regular assessment or summary assessment, said Ms Gupta.

For example, a taxpayer has already paid an income tax of Rs 3.20 lakh by way of TDS. But in the summary assessment after filing ITR, the actual tax liability of the taxpayer comes at Rs 2.98 lakh then the taxpayer will receive a refund of Rs 22,000 but without any interest, as the due refund amount is less than 10% of the tax liability of Rs 2.98 lakh.

In case the refund amount is more than 10% of the actual tax liability then interest @0.5% for every month starting from April 1 of the assessment year to the date on which the refund is granted is paid provided the ITR is filed within the due date. "If the refund is not furnished by the due date, then interest shall be calculated from the date of furnishing ITR to the date on which the refund is granted," said Ms Gupta.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2021 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting