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Sharad Mohan Krishna (AVP)     18 December 2015

Interest on refund of income tax

The Income Tax authorities had taken away money out of my bank accounts as also took over my monthly salary, by making best judgement assessments. Post my appeals, all the matters were decided in my favour. Now they have refunded my money with only 6% interest and that too, after a lot of pursuing/complaints/grievances/letters/visits (almost 10 months after the judgements in my favour).

My queries:

1.  Can I claim more interest since I have actually incurred (with proof) an interest of 18% on my house dues.

2.  Can I claim interest for the delay of 10 months in releasing my refunds.



Learning

 7 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     18 December 2015

Yes. You can claim for interest of the litigation period. 

siddhartha sinha   18 December 2015

Interest is to be paid for the period between 1st day of april of assessment year relevant and actual date of refund. The delay should not be because of assessee however. Rate of interest is fixed by law and you can move court for extra. Remember that interest on refund is also taxable.

Sharad Mohan Krishna (AVP)     18 December 2015

Thank you for the replies. A few clarifications:

1. You have stated that I can claim for the litigation period - but what RATE?  - Is it only 0.5% per month OR it can be 1-1.5% per month.

2.  You have also talked about proceeding to the court - are there any case laws which suggest that courts have decided in favour of the assessee for higher interest compensations.

Thanks... Sharad

Sharad Mohan Krishna (AVP)     18 December 2015

Also, I am not worried about the technicalities (eg., starting from 1st April, etc etc) since the stakes are high. The amount of refund was around 40 lacs and therefore I am hurt on both the counts: 

1. The low rate of interest of only 6% (ie., 0.5% per month) &

2. The delay in releasing the refund of around 10 months for no reasons despite my innumerable visits/letters/reminders/grievances on the cpgrams website/etc.

Thanks... Sharad

Ms.Usha Kapoor (CEO)     24 August 2016

CURRENTLY  only 6 % INTERST ON REFUND IS  ALLOWED AS PER it LAW. a HIGH LEVEL COMMITTEE OR PANEL made  SOME RECOMMENDATIONS IN  THIS REGARD.  For DELAY OF MORE THAN 6 MOTHS IS MADE FOR REFUND 12% INTERST IS PAYABLE AND IF MORE THAN A YEARS SDEALY IS MADE 18% INTEREST IS PAYABLE. sO U CAN'T GET 18%  INTEREST ASCLAIMED BY YOU FR Q10 MONTHW  DELAY.

Ms.Usha Kapoor (CEO)     24 August 2016

CURRENTLY  only 6 % INTERST ON REFUND IS  ALLOWED AS PER it LAW. a HIGH LEVEL COMMITTEE OR PANEL made  SOME RECOMMENDATIONS IN  THIS REGARD.  For DELAY OF MORE THAN 6 MOTHS IS MADE FOR REFUND 12% INTERST IS PAYABLE AND IF MORE THAN A YEARS SDEALY IS MADE 18% INTEREST IS PAYABLE. sO U CAN'T GET 18%  INTEREST ASCLAIMED BY YOU FR Q10 MONTHW  DELAY.

Srinivasan (Tax Consultant)     29 November 2016

you can claim interest for further 10 months. But you cannot claim more than 6% because it is fixed by GOVT. And it is also taxable income.


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