Hello,
I believe that the interest we receive on refunds of income tax is to be reported and is taxable. (INTEREST U/S 244A ON REFUND).
This year, I received around 10,000 Rs. as "INTEREST U/S 244A ON REFUND". However, my refund amount was paid only after I cleared some of the previous year's pending dues by "Agreeing to the demand" on the IT portal. Along with those pending dues, the IT officer also charged interest (around Rs. 6,000) for delay in payment of those dues.
My question is: Can this 6,000 interest charged be nullified against the interest earned (10,000) and only 4,000 Rs. reported for NET interest u/s 244A on Refund, or do I need to report and pay tax on entire 10,000?
Please let me know.
Thanks
CAclubindia
