Refund as Taxable Income?

Rajesh (NA) (248 Points)

13 July 2021  

Dear Experts.

In ITR utility I notice that in ITR1 or 2 in Other Income sources, it has a field for Income Tax Refund.

However I strongly feel that it's a wrong naming of the field in the utility.

It should have been named as Interest on Refund. Only the interest earned on refund should be taxable. Refund was earning from previous year whose tax liability was settled in that previous year.

Would appreciate a confirmation on this.

Thanks