Budget 2024: Wait for tax refund may irk you more

July 24, 2024

This is one budget proposal that may disappoint taxpayers. Not only has the period of withholding of tax refund been extended, but you may also lose out on interest paid for a delayed refund.

Currently, if you file an I-T return claiming a refund, and assessment proceedings are pending for any earlier year, the I-T officer can withhold the refund till the completion of earlier year's assessment if they think that the 'interest of the revenue will be adversely affected'.

But, the officer has to obtain the commissioner's nod.

The interest on refund at 6% per annum is not computed for the period beginning the date on which the refund was withheld and ending with the date on which the assessment/reassessment for the earlier year is made. The explanatory memorandum points out that the period of withholding the refund up to the date of assessment was found to be inadequate, as any tax demand becomes due only 30 days from the close of the assessment or reassessment. Thus, the budget proposes to extend the period of withholding of refund up to 60 days from date on which assessment or reassessment of the earlier year is made.

[The Times of India]