At times getting refunds from the Income Tax Department becomes time taking and tiring exercise. Thus, in majority of cases, the tax payers do not get their rightful refunds on time. There is an in-built provision in the law for interest on the late refund issued to the taxpayers to off-set some hardship.
As per section 244A, the taxpayer is entitled to receive interest where any refund arises due to any excess payment of tax, in the following scenarios:
Where refund is out of any advance tax or tax deducted or tax collected at source, the interest is receivable @ 0.5 per cent per month from the first day of the assessment year to the date of grant of refund. However, no interest is receivable if the excess payment is less than 10 per cent of tax determined under section 143(1) or on regular assessment; OR where refund is of tax other than advance tax or tax deducted or collected at source, interest is receivable @ 0.5 per cent per month from the date of payment of such tax or penalty up to date on which the refund is granted.
Further, for the purpose of computation of interest, the amount on which interest is receivable by the assessee shall be rounded off to the nearest multiple of Rs. 100 ignoring the fraction thereof.
Thus, in case you have received the refunds late, request you to please check, whether the refund given is including the interest or not. In case you need any assistance with regard to getting refunds from Income Tax Department, request you to please contact us immediately.
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