ITR Refund: 5 Income Tax Rules You Should Know

Speaking on Income Tax Rules in respect of ITR refundBalwant Jain, Mumbai-based tax and investment expert said, “If a taxpayer has missed filing ITR within the given due date for filing ITR, one can file his ITR by paying late fee. Anyone who has filed ITR after 31st July 2022, he or she will not get any interest on ITR refund from 1st April 2022. Balwant Jain further said that a taxpayer’s ITR refund is not an income but interest earned on ITR refund is one’s income and one has to add this interest to his annual income while filing Income Tax Return for AY2023-24.

On how the interest on ITR refund is calculated, SEBI registered tax and investment expert Jitendra Solanki said, “The interest on ITR refund is calculated month after month at a monthly interest of 0.50 per cent as well as section of the Income Tax Act. 234D. Recovery of interest on excess refund granted to the taxpayer.” He said that any fraction of a month would be treated as full month and interest would be calculated as such.

Here we are 5. let’s list income tax rules What you need to know regarding ITR refund:

1]Eligibility: Taxpayers filing ITR on or after the due date are eligible for ITR refund.

2]Interest on ITR Refund: If a taxpayer has filed ITR within the due date of 31st July 2022, he will get interest on ITR refund with effect from 1st April 2022.

3]Interest Rate on ITR Refund: A taxpayer filing ITR within the given due date is eligible for 0.50 percent monthly interest on his ITR refund amount.

4]Taxation Rules on ITR Refund: ITR refund amount is the income that the taxpayer has already reported in the relevant financial year. Hence, the ITR refund amount is non-taxable. However, the interest earned on the ITR refund amount is taxable as per the income tax slab applicable to the taxpayer after adding the interest amount with the net annual income of the individual.

5]Calculation of Interest on ITR Refund: While computing interest on ITR refund, any fraction of a month will be treated as one month while any fraction of Rs. For example, if we want to calculate the interest 8,489 for 3 months and 10 days, then while computing the amount liable to interest, any fraction of 100 is to be ignored and hence, we will ignore it from 89 8,489 and the balance will come 8,400, the interest u/s 234D will thus be computed 8,400. Further, a period of 10 days will be treated as a complete month and hence, interest will be calculated for 4 months.

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