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Interest on income tax refund not given

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Ritwik

23 Points Posted on 29 July 2024

I filed my IT return last month (June first week) and today I received the exact amount deducted as TDS but I didn't receive the interest at the rate of 0.5% for each month or part of month starting from April 2024 as stated in IT Act . I would like to know whether I should have gotten interest on TDS refund along with the TDS which was actually deducted in April 2023. Thanks

Replies (3)

Quick Summary

A taxpayer filed their return in June and received their TDS refund but not the expected 0.5% monthly interest. They are inquiring if interest is due on their refund, especially since their refund amount is small (around £3000). While the Income Tax Act mentions interest on refunds, it's unclear if there's a minimum refund amount required to qualify for this interest, or if the interest itself needs to exceed a certain threshold.

CA Anoop Kumar Sharma

Accounts Manager

1470 Points Posted on 29 July 2024

Kindly check that interest on the refund is calculated only if the refund amount exceeds 10% of the tax payable otherwise interest will not be paid.

Ritwik

23 Points Posted on 29 July 2024

I have zero tax liability entire TDS I paid is refunded without paying interest . I also checked with others in my circle and they also received refund without the benefit of interest. My refund amount is only Rs.3000, is there a minimum amount of refund to qualify for interest ?

CA Anoop Kumar Sharma

Accounts Manager

1470 Points Posted on 31 July 2024

I am not entirely sure, but it seems that the interest amount on your refund might be too small to be issued.

According to income tax provisions only states that if the refund or demand is less than ₹100, it won't be paid or received, but this doesn't specifically address the issue of interest.