Interest on refund

This query is : Resolved

Guest

Guest (Querist)

22 October 2013 hi

how the interest calculation of refund be made by the department

Interest rate ?

period from which it applies ?

CA Pallav Singhania

CA Pallav Singhania (Expert)
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22 October 2013 As per Section 244A of the Income-tax Act, a taxpayer is entitled to interest @ 0.5% for every month or part of the month, (6% per annum) from the first day of April of the assessment year to the date on which the refund is granted, where the refund arises on account of TDS or advance-tax payment.

It needs to be borne in mind that as per the proviso to Section 244A, no interest is payable if the amount of refund is less than 10% of the tax payable by the taxpayer.

In cases other than refund on intimation u/s. 143, such interest is calculated from the date of payment of tax or penalty to the date on which refund is granted.

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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22 October 2013 Illustration:
For the Assessment Year 2011-12, a taxpayer has filed his income-tax return claiming a refund of Rs.30,000. The intimation under Section 143(1)(a) is passed by the Assessing Officer on 15-10-2012, but the refund order is issued on 10-04-2013.

The Assessing Officer has computed interest of Rs.2,850 @ 0.5% p.m. for a period of 19 months only i.e. from April, 2011 to October, 2012.
However, since the refund order is issued in April, 2013, the taxpayer is actually entitled to interest of Rs.3,750, @ 0.5% for a period of 25 months i.e. April, 2011 to April, 2013, when the refund order is actually issued. It also needs to be noted that for the purpose of computing the interest, even part of a month is to be treated as a full month.

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Guest

Guest (Querist)

22 October 2013 Aryan Ji Thanks a lot

Guest

Guest (Querist)

23 October 2013 I e filed return for A.Y. 2013 -14 belated on 27/09/2013 claiming refund Rs.5000

so

Should I be eligible for refund from 01/04/2013 ?

because I have heard belated return is eligible for refund from the date of filing of return

CA Pallav Singhania

CA Pallav Singhania (Expert)
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23 October 2013 Yes, you can claim refund in belated return,
there is no such restriction for refund,

However you cannot revised it,
You can not Carry forward Losses..

regards,

Guest

Guest (Querist)

23 October 2013 Sir I am saying

For belated return ,

from which date refund will be calculated

is it from 01/04/2013?????

or from 27/09/2013???

CA Pallav Singhania

CA Pallav Singhania (Expert)
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23 October 2013 In my view from 1/4/2013....

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Guest

Guest (Querist)

23 October 2013 thanks sir