You only need to submit your income tax return and documented documentation of your income and deductions to the department in order to obtain your income tax refund. It is crucial to keep in mind that filing the form online is required in order to receive your income tax refund.
Here are 5 income tax regulations regarding ITR refunds that you should be aware of:
1] Eligibility: ITR refunds are available to taxpayers who file their returns on time or after the deadline.
2] Interest on ITR refund: If a taxpayer submitted an ITR by the deadline of July 31, 2022, interest will begin to accrue on the refund as of April 1, 2022.
3] Interest rate on ITR refund: A taxpayer who files an ITR by the deadline is entitled to monthly interest of 0.50 percent on the amount of their ITR refund.
4] Taxation rules on ITR refund: The amount of an ITR refund is income that the taxpayer has already reported for the relevant fiscal year. ITR return money is therefore not taxed. However, after adding the interest amount to the person's net annual income, the interest generated on the ITR return amount is subject to taxation according to the taxpayer's applicable income tax bracket.
5] Interest calculation on ITR refund: Any fraction of a month will be treated as one month when calculating interest on ITR refunds, but any fraction of a rupee will be disregarded. For instance, if we want to calculate interest on $8,489 for 3 months and 10 days, any fraction of a hundred is to be disregarded when calculating the amount subject to interest; therefore, we will disregard $8,489 from $8,489 and the balance amount will come to $8,400 consequently, interest under section 234D will be computed on $8,400. In addition, a period of 10 days will be treated as a full month, and interest will therefore be calculated over a period of 4 months.