Section 244A Amended: New Interest Rate on Tax Refunds and Additional 3% Annual Interest for Specific Orders
Section 244A of the Income-tax Act was amended effective June 1, 2016, to modify the calculation of interest on tax refunds. The amendment specifies that interest at a rate of 0.5% per month is applicable for refunds from tax collected at source, advance tax, or tax paid under section 140A, calculated from specified dates. No interest is payable if the refund is less than 10% of the assessed tax. Additionally, a new sub-section (1A) introduces an extra 3% annual interest for refunds resulting from certain orders, beyond the regular interest. Sub-section (2) now includes references to interest under sub-sections (1) and (1A).
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