NEW DELHI: Many taxpayers who acquired revenue tax refund had been shocked after they realised the curiosity was lacking. As per guidelines, a taxpayer is eligible for curiosity on refunds however not all refunds.
Let’s perceive when and the way a lot curiosity you might be eligible for.
In case your tax legal responsibility for the monetary 12 months is lower than the tax you’ve got already paid by means of tax deducted at supply (TDS), tax collected at supply (TCS), advance tax or self-assessment take a look at, you might be eligible for tax refunds. One can declare these tax refunds by submitting the ITR inside a stipulated time.
The tax division points a refund after processing an ITR.
“However, no interest shall be payable, if the amount of refund is less than 10% of the tax determined on summary assessment or regular assessment,” stated Tarun Kumar, a Delhi-based chartered accountant.
For instance, if a taxpayer has a tax legal responsibility of Rs5,48,000, his TDS deducted was Rs5,98,000, a refund of Rs50,000 could be claimed by submitting an ITR. However, on this case, the taxpayer is not going to be eligible for curiosity on refund since it’s lower than the ten% of the tax quantity.
Had the tax refund quantity been increased, he would have been capable of declare refunds.
In case the refund exceeds the restrict, the taxpayer will get due curiosity. “If refund arises out of TDS, TCS or advance tax paid throughout the monetary 12 months, the curiosity shall be calculated on the charge of 0.5% for each month or a part of month,” stated Kumar.
The calculation of curiosity begins from April of an evaluation 12 months.
“If ITR has been furnished by the assessee on or earlier than the due date, the curiosity shall be payable from April 1 of the Assessment Year to the date on which the refund is granted. If the tax return shouldn’t be furnished by the due date, the curiosity shall be payable from the date of furnishing return of revenue to the date on which refund is granted,” stated Kumar.
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