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Refund of Income Tax

CA NEHA SHARMA (CA) (81 Points)

14 June 2011

plz tell me what is the tax treatment of Refund of Income Tax ????

If :-

There is no interest on Refund ??

There is Interest ??

Its Urgent.............

Thanks.....

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18 Replies

suresh (proprietor) (425 Points)
Replied 14 June 2011

WHEN U DEPOSIT THE CH. OF REFUND WITHOUT INTEREST U NEED TO DEBIT BANK A/C AND CREDIT CAPITAL A/C IF U HAVE DEBITED THE TOTAL AMT. OF TAX OR TDS WHEN ITS IS PAID OR DEDUCTED.

AND IF U HAVE NOT DEBITED THE SAME TO THE CAP. A/C AT THE TIME OF PAYMENT OR TDS THEN U HAVE TO CREDIT IT TO THE RESPECTIVE A/C OF TAX OR TDS WITH THE REFUND AMT. AND BAL. AMT. OF TAX THAT IS TAX PAYABLE IS TO BE DEBITED TO CAP.A/C

WHERE U GOT INTEREST ON IT REFUND SAME IS TO BE CREDITE TO INTEREST ON IT REFUND UNDER THE HEAS OF INCOME.;

1 Like

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suresh (proprietor) (425 Points)
Replied 14 June 2011

sSO FAR TAX TREATMENT I SCONCERNED ONLY INTEREST PART IS TAXABLE INCOME.

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 14 June 2011

it should be transffered to capital account

CA Devender Chauhan (Group Financial Accountant) (1526 Points)
Replied 14 June 2011

Originally posted by : suresh
	sSO FAR TAX TREATMENT IS CONCERNED ONLY INTEREST PART IS TAXABLE INCOME.

agree

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 14 June 2011

IF THERE IS INTEREST THAN INTEREST PART WILL BE TAXABLE

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SHASHI VARDHAN (Pay Accts) (99 Points)
Replied 14 June 2011

Dear Neha,

if you are asking about interest on Income Tax refund then it is 1/2% (half percent) per month from the date of filing ITRs to the date of issue if the refund.

If there is any interest on IT refund issued by IT deptt then you will be not liable to pay any tax on it.

Somshekar (Rankholder) (-) (158 Points)
Replied 14 June 2011

Interest on refund is computed as per section 244A of the Income-tax act, 1961 @ 0.5 % per month or part of a month, from the date of filing of return to date of issue of refund. It is taxable under the head " Income from other sources"

2 Like

rachit jain (chartered accountant ) (635 Points)
Replied 14 June 2011

no tax on refund.

interest is taxable under other sources.

Apurba Ghosh (not any) (245 Points)
Replied 15 June 2011

According to me the interest will be paid by the department in case of delay in payment of Refund @ 6% P.A for the period started when the payment is due to till the payment has been made.

Nitin Grover (CS) (1228 Points)
Replied 15 June 2011

Dear Friend

Income Tax Refund will be added / transfer to Capital Account and Interest on this will be treated as Income from Other Sources and it will also be transfered to Capital Account.

If Refund Amonut is less from Our Actual Refund amonut then Capital will be deducted by this amonut.

Regards

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gordonwhite (na) (21 Points)
Replied 15 June 2011

It is the direct debit into your bank account with check or online transfer.

__________

Gordon

CS Bijoy (Expert) (6394 Points)
Replied 15 June 2011

According to me the interest will be paid by the department in case of delay in payment of Refund @ 6% P.A for the period started when the payment is due to till the payment has been made.

kaushal (C.A. Student & Audit Assistant ) (44 Points)
Replied 15 June 2011

Hey Neha

If you are asking for the tax treatment then according to me that there is no tax levied on IT refund but if there is intrest on refund which is calculated as 6% p.a or 0.5% per month from the date of filing the return to the date of issue of refund, is taxable under the head of income from other sources.

If you are asking for its accounting tratment then I m agree with Mr. Suresh