18 March 2009
An salaried individual has received interest on income tax refund in A.Y.2009-10. The refund is received after 20 yrs since a case was going on with the dept. Now what will be the tax treatment since the interest received on income tax refund is for 20 yrs? Will it be taxable wholly under the head 'Income from other sources'? Can it be set off against any losses? Will the interest paid on hypothication of movable asset be allowed to set off against this income?
18 March 2009
Interest will be taxable as income from other sources. Interest paid on loan cannot be adjusted against it. Yes, you can set off only those losses against it which can be set off against income from other sources in normal cases.
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