Form 26AS shows a credit and tax deduction under ASSISTANT COMMISSIONER OF INCOME TAX

Must be interest paid on refund amount....

Yes, it has to be declared under Other income....

Yes Dhiraj Sir is absolutely right.

It is interest on tax refund and is taxable -to be declared as income in tax refund 

Thank you - @ Dhirajlal Rambhia and @ Sushant Bidaye.

You are welcome.                             

That entry is interest on your income-tax refund:

• When CPC Bengaluru (deductor "ACIT CPC", TAN BLRA...) issues a refund, it pays interest under Sec 244A. The interest is shown in 26AS/AIS as a credit, with TDS where applicable.

• Interest on refund is taxable under "Income from Other Sources" in the year of receipt (not exempt). Report it in Schedule OS under "Interest on income-tax refund" and claim any TDS shown.

• Only the interest is income. The refund of tax itself is not income.

• If the refund interest is later withdrawn on reassessment (Sec 244A(3)), the taxed interest can be reduced through rectification in that year (Sec 56(2)(viii) / 57(iv)).

• For a refund received through a 154 rectification, check that the interest isn't double-reported.

A credit from “Assistant Commissioner of Income Tax, CPC Bengaluru” is generally a tax refund or other payment processed by the Income-tax Department, rather than income paid by an ordinary deductor. Check the amount against your refund status and bank statement, and review the related assessment year and section/code in Form 26AS or AIS. The date 31 March 2025 alone does not identify the payment.

Do not report the gross credit as “Other Income” automatically. If it is interest on an income-tax refund, that interest is generally taxable under “Income from Other Sources” in the year received; the refund of tax itself is not income. If the credit is something else, its tax treatment depends on its nature. The 26AS/AIS descripttion or refund intimation should help confirm which applies.

Reconciling the 26AS credit with the refund intimation and bank entry is a useful step before finalising the return. Manual checking across statements and tax records can be time-consuming; automation reduces repetitive work while professional judgment remains in control. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. For a faster compliance workflow, connect with us on WhatsApp: https://wa.me/message/3HVOZ7HIY4ESC1