Received income tax refund without interest? You might not be eligible

 








New Delhi: 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.

Comments

Post a Comment

Popular posts from this blog

Centre appeals against ruling on levy of GST on maintenance charges to resident welfare associations

Image
  The Centre has preferred a writ appeal before the Madras High Court against a single judge's order that flat or villa owners paying more than ₹7,500 a month towards maintenance charges to their residents’ welfare associations must pay Goods and Services Tax (GST) at the rate of 18% only for the amount exceeding ₹7,500 and not for the entire monthly contribution. Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup on Wednesday allowed an application filed by the Centre to dispense with production of a certified copy of the judgment passed by Justice Anita Sumanth recently and directed the Registry to list the appeal for admission in the usual course. Justice Sumanth had in July this year quashed an order passed by the Authority for Advance Ruling (AAR) on June 21, 2019 as well as a consequent circular issued by the Department of Revenue under the Union Finance Ministry on July 22, 2019 since both of them had insisted upon collecting GST for entire monthly contribution. The jud...
Read more

Seven key things to know before filing income tax return (ITR) for FY21

Image
  The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process. 1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS. 2) Taxpayers will have the ...
Read more

Income Tax Dept detects ₹350 cr unaccounted cash receipts after raid in Rajkot

Image
  The Income Tax Department carried out a search and seizure operation on a real estate group based in Gujarat's Rajkot and found unaccounted cash receipts in various projects of approximately ₹350 crore, the Finance Ministry said on Friday. The group is among Gujarat’s prominent real estate builders and developers and is actively engaged in real estate, construction and land trading businesses in and around Rajkot. More than 40 premises were covered in the search operation. During the course of operation, many incriminating documents and digital evidences were seized indicating involvement of the group in unaccounted transactions. The IT sleuths found substantial evidence of transactions outside the regular books of accounts, unaccounted cash expenses, cash advances received and interest paid in cash. Evidence of on-money payments in real estate projects-flats, shops and land deals has also been found. Total unaccounted cash receipts in various projects of approximately ₹350 crore...
Read more