Income tax update

No Interest received on income tax refund cannot be setoff against Delayed payment of Interest on incomet tax. The same delayed payment of interest must be paid in order to avoid penalty. and the Interest received on refund must be shown as Income from Other sources while computing Income tax

Interest received on refund must be shown in income from other souces.

Dear Ashraf & Chintan,

Arun is not asking any query. Information provided by Arun Kumar is about decided case law.

DCIT v. Bank of America NT & SA (ITAT Mumbai) – Tribunal held that interest received on income tax refund can be set-off against the interest paid on delayed payment of income tax and only net amount is to be taxed.

Regards,

Jayesh

thnks for the info jayesh

Dear All

Pls. refer recent case law of  "Pune Tribunal rejects set off for interest paid and received on income tax" after judgement of DCIT v. Bank of America NT & SA (ITAT Mumbai)

Extract from case law "the recent ruling of the Pune Tribunal (Pune Tribunal) in the case of Sandvik Asia Limited (Taxpayer) on the issue of whether interest paid on income tax due can be set off against interest received on income tax refunds under the Indian Tax Laws ( ITL). Before the Division Bench of the Pune Tribunal, there was a difference of opinion between the Members and, accordingly, the issue was referred to the Third Member for a majority opinion. The Third Member held that the interest paid and interest received from the Tax Authority cannot be set off against each other and the whole of the interest received is taxable under the ITL. The Pune Tribunal also held that the interest paid on income tax due was not deductible as business expenditure under the ITL."