Interest on Excess Tax - Interest on IT Refund
Interest on Excess Tax - Interest on IT Refund The Income Tax Act 1961, stipulates that refund to a taxpayer shall include interest on excess collection of taxes, as under: i.In case of processing of the return of income: From 1st April of the Assessment Year to the date of processing of return, and ii.In case of giving effect to appellate orders etc: From the date/s of payment of excess tax to the date of giving effect to the appellate order. It is hence submitted that payment of interest on refund is not on account of delay in issuance of refunds but is a statutory obligation arising on account of provisions inbuilt in the law itself. The amount of funds spent on payment of interest on excess tax in past three years is tabulated as under: Financial Year Interest paid on refund (in Rs. Crores) 2009-10 6876 2010-11 10499 2011-12 6486 2012-13 Not Available The outgo towards interest on refunds is treated as “reduction from gross tax collections” an...