Intrest on income tax refund

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rajat (Querist)
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29 June 2012 Dear All

Please tell at what rate interest on refund is paid and from what date for Fy 11-12 and Ay 12-13 .

Tax was deducted in the form of TDS from FDs and refund is due

Thanks

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 July 2012 @ 1/2 % per month or part of a month is allowed ,u/s 244A of the Income tax Act 1961,
from the 1st day of the relevant assessment year to the date on which the refund is granted.

rajat

rajat (Querist)
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01 July 2012 Thanks for your response

Please clarify date from which intrest is calculate for FY 11-12 and AY 12-13

THANKS

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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01 August 2024 Interest on income tax refunds is governed by Section 244A of the Income Tax Act. For Financial Year (FY) 2011-12 and Assessment Year (AY) 2012-13, the interest on refunds is calculated as follows:

### **Interest Calculation on Refunds**

1. **Interest Rate:**
- The interest rate on refunds is **6% per annum**. This rate applies to refunds due for the FY 2011-12 and AY 2012-13.

2. **Calculation of Interest:**
- Interest is calculated on the amount of refund due from the date of the order of assessment or from the date of filing of the return (whichever is later) until the date of the actual refund.

### **Key Dates for Interest Calculation:**

- **For FY 2011-12 and AY 2012-13:**
- **Date of Filing of Return:** The date on which you filed your income tax return for FY 2011-12.
- **Date of Assessment Order:** The date when the final assessment order was passed, if applicable.
- **Date of Refund:** The date on which the refund is issued by the Income Tax Department.

**Interest is calculated from the later of the following dates:**

- The date of filing of the return, if the return is filed on or before the due date.
- The date of the order of assessment if the return is filed after the due date.

**Until:**

- The date when the refund is granted.

### **Example Calculation:**

- **Assume:**
- **Date of Filing Return:** 31st July 2012 (for AY 2012-13)
- **Date of Refund:** 1st January 2014
- **Interest Rate:** 6% per annum

**Interest Calculation Formula:**
\[ \text{Interest} = \text{Refund Amount} \times \text{Rate of Interest} \times \frac{\text{Number of Days}}{365} \]

- **Number of Days:** Calculate the number of days from the later of the date of filing the return or the date of assessment to the date of refund.

### **Summary:**

- **Interest Rate:** 6% per annum.
- **Calculation Period:** From the later of the date of filing the return or the date of the assessment order to the date of the refund.

If you are awaiting a refund and want to check the exact interest calculation, it may be useful to consult your tax advisor or review the calculation directly on your income tax account, as the Income Tax Department may provide details on the interest paid along with the refund.

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