ITR Refund Rules: After filing ITR, now there is a wait for refund, know – when will the money be returned in the account?

ITR Refund Rules: After filing ITR, now the income tax payers are waiting for refund. Some people have got their money, while some people are still waiting. In such a situation, those who have not got it yet, they should know how much interest will be available on the outstanding amount and by when the money will come.

The last date for filing Income Tax Return (ITR) for the financial year 2021-22 and assessment year 2022-23 is over. Those who have filed their IT return on or before 31st July 2022 have either got their ITR refund or are waiting for their ITR refund.

However, for those earning individuals who failed to file their ITR within the given due date, they can still claim the last date of 31st December 2022 by filing ITR return by filing ITR return.

But, such income tax payers will not get interest on their refund amount. ITR Refund Form 1st April 2022. Similarly, if a taxpayer is getting ITR refund, the principal amount is non-taxable, but interest on ITR refund will be treated as income in FY23 and will be considered as net annual income of the taxpayer. to be added at the time of filing ITR for AY2023-24.

While speaking on Income Tax rules regarding ITR refund, Mumbai based tax and investment expert Balwant Jain said, “If a taxpayer defaults to file ITR within the due date given for filing ITR If so, he can file ITR by paying penalty. Those who file ITR after 31st July 2022 will not get interest on ITR refund from 1st April 2022.

Balwant Jain further said that a taxpayer’s ITR refund is not an income but interest earned on ITR refund is one’s income and one has to add this interest to his/her annual income while filing income tax return for AY2023-24.

How interest is calculated on ITR refund, SEBI registered tax and investment expert Jitendra Solanki said, “The interest on ITR refund is calculated at a monthly interest rate of 0.50 per cent month-on-month. Also, there is a provision for section 234D of the Income Tax Act. Recovery of interest on excess refund given to the taxpayer.” He said that any fraction of a month would be treated as a full month and interest would be calculated as such.

Five rules regarding ITR refund

1. Taxpayers filing ITR on or after the last date are eligible for ITR refund.
2. If a taxpayer has filed ITR within the due date of 31st July 2022, then he will get interest on ITR refund with effect from 1st April 2022.
3. Taxpayers filing ITR within the last date are eligible for 0.50 percent monthly interest on their ITR refund amount.
4. ITR refund amount is an income which the taxpayer has already reported in the respective financial year. Hence, ITR refund amount is non-taxable. The interest earned on ITR refund amount is taxable as per the income tax slab applicable to the taxpayer after adding the interest amount with the net annual income of the individual.
5. While computing interest on ITR refund, any fraction of a month will be treated as one month, while any fraction of Rs.100 will be ignored. For example, if we want to calculate the interest on Rs.8,489 for 3 months and 10 days, then while computing the amount liable to interest, any fraction of Rs.100 should be ignored and hence, we can calculate the amount from Rs.8,489 to Rs. 89 and the balance amount will come to Rs.8,400. Thus the interest under section 234D will be calculated on Rs.8,400. Further, a period of 10 days will be treated as a complete month and hence, interest will be calculated for 4 months.