Section 234D - Interest on excess refund

Taxpayer must repay excess provisional refund with 0.5% monthly simple interest until regular assessment, reduced if later order restores refund

Where a taxpayer receives a refund under the provisional assessment process but no refund is due on the subsequent regular assessment, or the provisional refund exceeds the regular-assessment refund, the taxpayer must pay simple interest at one-half percent per month (or part month) on the whole or excess refunded from the refund date until the date of the regular assessment. If a later order (including certain rectification, appellate or settlement orders) upholds the provisional refund, the interest liability is reduced accordingly. Assessments made initially under reassessment or search/summary provisions are treated as regular assessments for these purposes, and the section also applies to years commencing before 1 June 2003 if proceedings conclude after that date.