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It refund and taxable income

Sambath Sundararajan (19 Points)

15 May 2021

I have IT refund for Fy 19-20,received during the FY 20-21.Whther I have to test it as income for the FY 20-21.

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12 Replies

pavan prabhas (206 Points)
Replied 15 May 2021

Any amount received as interest on refund shall be shown as interest income (comes under income from other sources) for the FY 20-21.

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CA Altamush Zafar (GST Consultant) (15986 Points)
Replied 16 May 2021

Refund of tax is not income but interest on such refund if any will be your income

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yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 16 May 2021

If we don’t receive the it refund, can we pay less the next year? What is the procedure to claim it refund.

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 16 May 2021

Refund of Income tax will not comes under income the interest on refund should be shown as income from other sources

veerendar singh (tax consultant) (3306 Points)
Replied 16 May 2021

Yasasvi we dont have the favour of making short payment of tax for subsequent years where we havent yet received the refund of previous years.

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Sivaramaraju G (Learner) (2398 Points)
Replied 16 May 2021

@ Sambath there is a logic for this. when government not allowed income tax as expense to assessee and they are paying back our excess paid taxes to us hence it won't be a income to us. if they allow it as an expense then they have a right to levy tax on it. anyway it is not an income and interest on will be taxable income.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 16 May 2021

Verendra Singh @ ok, then they can make the income tax office a private operated bpo company to address grievances quickly. I heard some other countries are not slow in processing an fir probably this happens because of lesser infrastructure. Anyways, it’s an auditors responsibility and so long to him.

veerendar singh (tax consultant) (3306 Points)
Replied 16 May 2021

Many taxpayers are hardly hit by this issue but the thing is that it is a kind of government's strategic decision making i.e., whether to disburse all refunds or withold it by incurring interest on such delayed disbursement. in times of cash crunch it is often seen that government delays payment of refunds. this is decided by higher echelons of the administration. so even if we have public relations cell or grievance redressal mechanism, there is usually no result in making complaints before those lower authorities. they can only give some tawdry unameliorating response to cool you down and make you wait for long time.
you see grievance cells are established to give people an opportunity to bring matters which are caused by wrong or erroneous actions of officers which may be corrected by taking some adequate actions. delayed refunds are not considered as a mistake or wrong thing to be corrected.

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yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 16 May 2021

Glad to hear it is not detrimental at all. But who knows there could be some victims like the Director Kavitha who posted her grievance here on CAclub days before that she is not able to get her refund and took strategic decisions to fire the ca. These inaccuracies, if there are no timing differences, must be mitigated properly because authorities are not finally responsible from what you advised me. Not only that, I also suffered improper training and someone asked me to send formatted invoice reminder emails with grammatical errors and my name on it. Once I refused, they tortured me including the foreign clients. I am going to America soon and they will not even call me for an interview if I work with foolish kind. Politicians, police and top level are involved in misconduct all the time. This becomes malfeasance instantly. Every where employees are victims due to colleges substandard produce. Everyone claims everyone are educated and now nothing wrong with it as long as my employment is smooth and only then I can make a company error free. Corporates are stealing my wages!!

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veerendar singh (tax consultant) (3306 Points)
Replied 16 May 2021

I think these intricacies of tax payers and malfeasance at top level bureaucrats have recently soared under modi's governance.

i am too startled by director kavitha's indiscreet action. but this is ubiquitously felt, even in courts. people feel like they are bereft of their democratic and liberal powers; authorities and judges feel like they are hogtied to follow the directions of politicians.

but yesasvi I have said that many are getting badly hit by these delinquencies. I dont get how you interpret my comment to mean that they are not detrimental.

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yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 16 May 2021

Verendra Singh @ the government processing is poor and everyone’s like that. The main problem starts there, your an example, I’m an example and conundrums everywhere. This is gonna be perpetual.i guess they take DELAY as a shibboleth or an adage despite technology.

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veerendar singh (tax consultant) (3306 Points)
Replied 16 May 2021

Well yes, while the torment has to be suffered by tax payers it is equally displeasing for us to witness such terrifying contrast in the technological leaps and the improvement in department's efficacy.

i have to agree that delay is becoming a departmental shibboleth, given despite having technology to process returns within one week refunds are delayed for months.

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