Interest on Tax Refund: In case of delay in getting the refund, the taxpayers also get interest on it. There is also a provision for this in the Income Tax Act. However, not everyone gets interest on delayed refunds. For this certain conditions must be fulfilled.
Most of the people wait for the interest on the refund after the delay. Under the rules of Income Tax, interest is paid to the taxpayers after delay in refund. In the Income Tax Act, interest is not paid on delayed refunds of all types. In such a situation, it is important for you as a taxpayer to know whether you will also get interest due to delay in income tax refund? If not, what could be the reason behind it? Today we are giving you information about this.
When a person has deposited TDS, TCS and tax on the basis of Advance Tax or Self Assessment Test and his tax liability is less than this, then the refund is issued by the Income Tax Department to such taxpayers. Goes. Any person can claim this amount by submitting an income tax refund form within a stipulated time.
Interest rule on tax refund
After the claim is submitted to the tax department, it is seen in its processing that there is no error in the claim of the taxpayers. As per income tax rules, if the amount of tax refund is 10% or less than the regular assessment, then the taxpayer does not get any interest on the refund.
Suppose a taxpayer has a tax liability of Rs 5,48,000 and his TDS is deducted at Rs 5,98,000 and he has claimed Rs 50,000 as income tax refund. In such a situation, the taxpayer will get a refund, but he will not get interest on this amount because it is less than 10 percent in comparison to the tax. If his tax refund was more than this, then he would have definitely got interest on it.
How much interest do you get?
If the refund amount is more than 10% of the tax, then the taxpayer will also get interest on the refund. If interest is made on refund compared to TDS, TCS and Advance Tax in a financial year, then it will get 0.50 percent interest for every month. The interest is calculated from the month of April of the assessment year.
