The due date to file income tax returns (ITRs) for financial year 2021-22 and assessment year 2022-23 was July 31 and, unlike previous years, the Union government did not extend the deadline. Taxpayers who filed their returns on or before July 31 (total 5.83 crore including a record 72.42 lakh on the due date) have either received their ITR refunds or they are waiting for their tax refunds.
Also Read: Record 72.42 lakh ITRs filed on July 31 deadline; cumulative count at 5.83 crore
Meanwhile, people who did not submit their returns by July 31, can do so till December 31, but will have to pay late fees-cum-fine. Also, they, too, can claim ITR refunds if they close their returns on or before the last day of the year. However, they will not get interest on their refunds from April 1, 2022.
Here are five rules one should know about ITR refunds:
(1.) Eligibility: Taxpayers filing returns within or after the due date (with late fees) are eligible.
(2.) Interest on refunds: If ITR was filed within the due date, he or she will get ITR refund as per April 1, 2022.
(3.) Interest rate: A monthly interest at 0.50% on the refund amount if ITR was filed on time.
(4.) Taxation rules: While the refund amount is non-taxable, the interest earned on it is taxable, as per the tax slab applicable on the salaried individual. For this, the interest amount is added to the individual’s net annual income.
(5.) Interest calculation: Any fraction of a month is treated as one full month, while any fraction of one hundred rupees is ignored. For example, 3 months 10 days will be considered as 4 months, and ₹8,489 as ₹8,400. Therefore, the interest will be calculated on ₹8,400 for 4 months.
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