244 Income Tax Act - Interest on refund where no claim is needed

Section 244 of Income Tax Act 1961 - Interest on refund where no claim is needed

(1) Where a refund is due to the assessee in pursuance of an order referred to in section 240 and the 1 Assessing Officer does not grant the refund 2 within a period of 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 3 fifteen per cent. per annum on the amount of refund due from the date immediately following the expiry of 4 the period of three months aforesaid to the date on which the refund is granted.

5 (1A) Where the whole or any part of the refund referred to in sub-section (1) is due to the assessee, as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in sub-section (1) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted :

Provided that where the amount so found to be in excess was paid in instalments, such interest shall be payable on the amount of each such instalment or any part of such instalment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted :

Provided further that no interest under this sub-section shall be payable for a period of one month from the date of the passing of the order in appeal or other proceeding:

Provided also that where any interest is payable to an assessee under this sub-section, no interest under sub-section (1) shall be payable to him in respect of the amount so found to be in excess.

6 (1B) Where refund of any amount becomes due to the deductor in respect of any amount paid to the credit of the Central Government under Chapter XVIIB, such deductor shall be entitled to receive, in addition to the said amount, simple interest thereon calculated at the rate of one-half per cent. for every month or part of a month comprised in the period, from the date on which-

(a) claim for refund is made in the prescribed form; or

(b) tax is paid, where refund arises on account of giving effect to an order under section 250 or section 254 or section 260 or section 262, to the date on which the refund is granted.

(2) Where a refund is withheld under the provisions of section 241, the Central Government shall pay interest at the aforesaid rate on the amount of refund ultimately determined to be due as a result of the appeal or further proceeding for the period commencing after the expiry of 7 three months from the end of the month in which the order referred to in section 241 is passed to the date the refund is granted.

8 (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.

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1. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).
2. Subs. by Act 42 of 1970, s. 43, for "six months from the date of such order" (w.e.f. 1-4-1971).
3. Subs. by Act 67 of 1984, s. 24, for "twelve per cent." (w.e.f. 1-10-1984).
4. Subs. by Act 42 of 1970, s. 43, for "the period of six moths aforesaid" (w.e.f. 1-4-1971).
5. Ins. by Act 41 of 1975, s. 56 (w.e.f. 1-10-1975).
6. Ins. by Act 7 of 2017, s. 78 (w.e.f. 1-4-2017).
7. Subs. by Act 42 of 1970, s. 43, for "six months from the date of the order referred to in section 241" (w.e.f. 1-4-1971).
8. Ins. by Act 4 of 1988, s. 97 (w.e.f. 1-4-1989)