Not received income tax refund yet? Here is how much interest you will get
Taxpayers are entitled to get an interest on their income tax refund under Section 244 of the Income Tax Act if they have paid excess income tax. The Central Board of Direct Taxes (CBDT) in a directive has said that taxpayers should not be denied interest on refunds unless the delay is caused by the assessee’s fault. Even in cases where the taxpayer is ‘rightly’ denied interest on refund, the assessing officer has to provide a written explanation for the denial.
Typically refund is made in two types of cases — if an excess amount is paid as advance tax or TDS, if excess self-assessment tax is paid by the taxpayer. Here are the conditions for getting interest on delay in tax refunds.
1) If you have filed your IT return before July 31 and paid an excess amount as advance tax or TDS, then you will be paid interest from April 1 of the assessment year to the actual date of refund. If you have filed your return after July 31, interest calculation will be done from the actual date of filing return rather than April 1 of the assessment year.
In such cases, refund interest is paid at the rate of 0.5% per month (6% annually). If the refund amount is less than 10% of actual tax liability, no interest will be paid to the taxpayer…..Read more>>