02 October 2008
Under the provisions of Income tax Act, Interest is either payable or receivable by the assessee. For calculating period part of the month is to be considered as full month. Now suppose I have paid tax on 15-01-08 which is refunded by Dept. on 17-08-08.
In above case, whether is be said that interest is due from Jan. to Aug. (i.e.8 months or it be 7 months (i.e. 15 jan to 14 Feb.= 1 month and so on. In that case 6 months are complete months and for 3 days being part of month is considered as full month)
Plese advise which is correct way to count no. of months ?
02 October 2008
in the sitaution explained by you, the refund arises because of excess payment of tax by you. hence, the interest on refund will be counted from the 1st day of the Assessement yr till the date of granst of refund. Thus, you should count froom 1st April'2008 - 17th Aug'2008.
02 October 2008
I presume that the assessment year concerned is 2008-09 and the tax paid on 15-01-2008 is advance tax.
If it is so interest is to be calculated from 01-04-2008 to 16-08-2008(both days inclusive).In other words you are entitled for 4 months and 16 days interest.
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