Filed your ITR? Here are 5 rules you should know about income tax refunds

The deadline for filing Income Tax Returns (ITRs) for financial year 2021-22 and assessment year 2022-23 was July 31 and unlike previous years, the central government did not extend the deadline. Taxpayers who filed their returns on or before July 31 (a total of 5.83 crore including a record 72.42 lakh on that date) have either received their ITR refunds or are awaiting their tax refunds.

Also read: A record 72.42 lakh ITRs were filed on July 31 deadline; Cumulative count is 5.83 crores

Meanwhile, people who do not file their returns by July 31 can do so till December 31, but will have to pay late fees and penalties. Also, they too can claim ITR refund if their returns are closed on or before the last day of the year. However, they will not get interest on their refund from April 1, 2022.

Here are five rules to know about ITR refund:

(1.) Eligibility: Taxpayers who file returns on or after due date (with late fee) are eligible.

(2.) Interest on repayment: If the ITR is filed within the due date, he or she will get the ITR refund as per April 1, 2022.

(3.) Rate of interest: Monthly interest at 0.50% on refund amount if ITR is filed on time.

(4.) Taxation Rules: While the refund amount is not taxable, the interest earned on it is taxable as per the tax slab applicable to the salaried individual. For this, the interest amount is added to the net annual income of the individual.

(5.) Calculation of interest: Any fraction of a month is considered as one full month, but any fraction of a hundred rupees is ignored. For example, 10 days of 3 months are considered as 4 months, and 8,489 as 8,400. Hence, interest is calculated 8,400 for 4 months.

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