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'Refund of Tax' by Income Tax Department

 

2.3.      REFUNDS OF TAX

If, any assessment year an assessee pays the tax which is more than the amount for which he is actually chargeable and if the assessee proves excess payment before the Assessing Officer, section 237 empowers the assessee to claim a refund  of the excess. Once the Assessing Officer is satisfied about the excess payment made by the assessee, he can allow the claim or refund.

Under the following cases a claim to refund may arise –

    1. When tax is deducted at source from salary, interest on securities od debentures, dividend at a rate higher than the rate applicable to the total income of an assessee.
    2. When tax paid in advance exceeds the amount of tax actually payable as determined at the time of refular assessment.
    3. When tax calculated was higher due to some mistake and later on tax liability is reduced on account of rectification of a mistake.
    4. When tax was calculated at the higher rate on the payment given to non-residents whereas they were actually chargeable at a lower rate of income tax.
    5. When due to double taxation , the assessee is entitled to a double taxation relief.

A- Who is allow to Claim Refund of Tax ? [ Sec. 238(1) ]

Where the income of one person is included in the total income of any other person, the latter alone shall be entitled to a refund in case of excess payment of tax in this case.

In the case of  death, incapacity, insolvency, liquidation or other cause, a person is unable to claim or receive any refund due to him, his legal representative or the trustee or guardian or receiver, as the case may be, shall be entitled to claim or receive such refund for the benefit of such person or his estate.

A Claim for  Refund  must be filed in the prescribed form and verified in the prescribed manner. Where any part of the total income of a person claiming refund consists of dividends or any other income from which tax is deducted at source, the claim for refund shall be accompanied by a certificate which is issued by the tax-deducting authority. The claim for refund may be presented by the claimant or through an agent or may be send by post.

B- Time Limit for Claiming Refund of Tax [ Sec. 239(2) ]

No such claim shall be allowed, unless it is made within the period specified hereunder, namely :—

(a)  where the claim is in respect of income which is assessable for any assessment year commencing on or before the 1st day of April, 1967,  4 years from the last day of such assessment year;

(b)  where the claim is in respect of income which is assessable for the assessment year commencing on the first day of April, 1968, 3 years from the last day of the assessment year;

(c)  where the claim is in respect of income which is assessable for any other assessment year, [one] year from the last day of such assessment year;

(d)  where the claim is in respect of fringe benefits which are assessable for any assessment year commencing on or after the first day of April, 2006, 1 (one) year from the last day of such assessment year.

C- Refund of Tax on Appeal etc. [ Sec. 240 ]

Where, as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the Assessing Officer shall refund the amount to the assessee without his having to make any claim in that behalf:

It is further provided that—

(a)  an assessment is set aside or cancelled and an order of fresh assessment is directed to be made, the refund, if any, shall become due only on the making of such fresh assessment;

(b)  the assessment is annulled, the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee.]

D- Interest On Delayed Refunds of Tax [ Sec. 243 ]

Central Government shall pay the assessee simple interest at 15% p.a.  [fifteen per cent per annum ] on the amount directed to be refunded from the date immediately following the expiry of the period of 3 months aforesaid to the date of the order granting the refund.

(2) Where any question arises as to the period to be excluded for the purposes of calculation of interest under the provisions of this section, such question shall be determined by the Chief Commissioner or Commissioner whose decision shall be final.

[(3) The provisions of this section shall not apply in respect of any assessment for the assessment year commencing on the 1st day of April, 1989 or any subsequent assessment years.

E- Interest On Refund of Tax Where No Claim Is Needed [ Sec. 244 ]

Where a refund is due to the assessee in pursuance of an order and the Assessing Officer does not grant the refund within a period of 3 month [three months]  from the end of the month in which such order is passed, the Central Government shall pay to the assessee simple interest at 15% p.a. [fifteen per cent per annum ] on the amount of refund due from the date immediately following the expiry of the period of 3 months [three] months aforesaid to the date on which the refund is granted.

F- Interest on refunds of Tax [ Sec. 244A ]

Where refund of any amount becomes due to the assessee, he shall be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely :—

(a)  where the refund is out of any tax paid or collected at source or paid by way of advance tax or treated as paid, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of 1½ % [one-half per cent] for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted:

Provided that no interest shall be payable if the amount of refund is less than 10% [ten per cent] of the tax on regular assessment;

(b)  in any other case, such interest shall be calculated at the rate of 1½% [one-half per cent] for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted.

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Various Authorities
Power Of Income Tax Authorities Relating To Search And Seizure [ Section 132 ]
Application Of Seized Or Requisitioned Assets [Section132(B)]
Power Of Survey [ Section 133a ]
Provision Relating To Power To Collect Certain Information [Section 133b]
Disclosure Of Information Regarding Assessees To Certain Authorities [ Section 138 ]
Payment of Tax
Modes of recovery of Tax
Refunds
Introduction- Deduction of Tax at Source (TDS)
Deduction of Tax from the “Salary” [ Sec-192]
Deduction Of Tax From Interest On Securities [ Section-193]
Deduction Of Tax From Deemed Dividend [ Section-194]
Deduction Of Tax From Interest Other Than Interest On Securities [ Section 194A]
Winning From Lottery Or Crossword Puzzle Or Card game And Game Of Any Sort [Section 194B]
Winning From Horse Race [ Section 194BB]
Payment To Contractor And Sub-Contractor [ Section 194C]
Tax Deducted At Source From Insurance Commission [ Section 194D]
Payments To Non-Resident Sportsmen Or Sports Associations [ Section 194E]
Commission, Etc., On The Sale Of Lottery Tickets [Section 194G]
Commission Or Brokerage [ Section 194H]
Payment Of Rent [ Section 194 I ]
Fees For Professional Or Technical Services [ Section 194J]
Time Limit For Filling Return Of Income [ Section 139(1)]
When Return Of Loss Should Be Filed [ Section 139(3)]
Can Return Be Filied Beyond Time [ Section 139(4)]
Can Revised Return Be Filed [ Section 139(5)]
What Is A Defective Or Incomplete Return [ Section 139(9)]
Who Should  Sign The Return Of Income [ Section 140]
Permanent Account Number (PAN)
Why Every Person Needs Tax Planning ?
How is Tool of Tax Planning Exercised ?
Methods Of Tax Planning
Tax Avoidance
Tax Evasion
The Difference Between ‘Tax Planning’ And ‘Tax Management’
The Difference Between ‘Tax Avoidance’ And ‘Tax Evasion’.
Procedure for imposing Penalty [ Sec. 274]
Various Types Of Penalties In The Event Of Default.
Prosecutions
Salient Features Of FBT

Important Points Relating To Fringe Benefit Tax
Characteristics Of FBT
Classification Of Employer For FBT
Classification Of Not Employer For FBT
Direct Fringe Benefit
Deemed Fringe Benefit
Payment Of FBT To The Government
Filing Of FBT Return
Service Tax – Key Provisions At A Glance
Applicability Of Service Tax
Service Tax Rate
Registration Formalities
Payment & Refund Of Tax
Filling Or Returns
Assessments
Central Value Added Tax (Cenvat) Credit
Penalties & Prosecutions
Concept of VAT
Types of Dealers
General terminology used in VAT
Advantages of VAT over Sales Tax
VAT Rates
Computation of VAT and Profit
Items Covered in Indian VAT
Inter-State Sale
What are the objectives of CST Act ?
What are the conditions for CST Act to become applicable.
Rate of CST
Sale Price
CST Transactions Forms
Classification of Seller for TCS
Classification of Buyer for TCS
Goods and Transactions classified under TCS.
Certificate of TCS
TCS Exemptions
Payment of TCS to the Government
Electronic TCS (e-TCS)
Filing of TCS Returns
For removing any Asset, Books of account, documents etc. found during search in contravention of order served under [Section 132 (3)]
Removal, Concealment, transfer or delivery of property to avoid tax recovery [Section 276]
Default on the part of Liquidator [Section 276 (A)]
Failure to comply with provisions regarding transfer of immoveable property [Section 276 AB].
Failure to pay the tax deducted at source [Section 276 W]
Failure to pay the tax collected at source [Section 276 (BB)]
Willful attempt to evade Tax, Penalty, Interest etc. [Section 276 C (1)]
Failure to furnish return of income (Section 276 CC)
Failure to furnish return of income in search cases u/s 158 BC (Section 276 CCC)
Failure to produce accounts and documents [Section 276 (D)].
False Statement in Verification [Section 277]
Falsification of books of account or document, etc. [Section 277A]
Abetment in False Return (Section 278)
Punishment of Second and Subsequent Offences (Section 278 A)
Punishment not to be imposed in certain cases (Section 278 AA)
Offences by Companies (Section 278 B)
Offences by Hindu Undivided Families. (Section 278 C)
Presumption as to Assets, Books of Account etc. in certain cases. (Section 278 D)
Prosecution to be at the instance of commissioner [Section 279]
Meaning of Settlement Commisions
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Jurisdiction And Powers Of Settlement Commission [Section 245BA]
Vice-Chairman To Act As Chairman [Section 245 BB]
Transfer Of Cases [Section 245 BC]
Decision To Be Majority [Section 245 BD]
Application For Settlement Of Cases [Section 245 C]
Calculation Of Additional Income-Tax [Section 245C (1A)]
Bar On Making Application [Section 245C (1E)]
Procedure On Receipt Of Application [Section 245D]
Payment Of Additional Income-Tax [Section 245D (2A)]
Power Of Settlement Commission To Order Provisional Attachment To Protect Revenue [Section 245DD (1)]
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