September 2025 – Page 30 – Direct and Indirect Taxes with Tax Ready Reckoner

[Section 220(2)]: Interest for Late Payment of Demand of Tax, Interest, Penalty, Etc.

Interest and Fee Payable, Tax Ready Reckoner

Section 220(2) of the Income Tax Act, 1961, imposes interest @ 1% per month on unpaid tax demands if the assessee fails to pay within 30 days of receiving the notice. 1. Key Provisions of Section 220(2) When Does Interest Apply? Tax demand raised(regular assessment, reassessment, penalty, etc.). Assessee fails to paywithin 30 days of the demand notice. Interest Rate & Calculation 1% […]

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[Section 201(1A)]: Interest for Failure to Deduct or Pay Tax at Source

Interest and Fee Payable, Tax Ready Reckoner

Section 201(1A) of the Income Tax Act, 1961, imposes interest on a deductor (employer, company, etc.) who either: Fails to deduct TDS(Tax Deducted at Source), or Deducts TDS but fails to deposit itwith the government on time. 🔹 Key Provisions of Section 201(1A) When Does Interest Apply? DEFAULT INTEREST RATE PERIOD OF CALCULATION Failure to deduct TDS 1% per month From the

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[Section 244A]: Interest Payable to Assessee on Tax Refunds

Interest and Fee Payable, Tax Ready Reckoner

Section 244A of the Income Tax Act, 1961, governs the interest paid by the Income Tax Department to taxpayers when refunds are delayed. This ensures taxpayers are compensated for the government’s use of their money. 🔹 Key Provisions of Section 244A When is Interest Payable? Interest is paid if: ✅ Refund arises due to excess tax paid (TDS, advance tax, self-assessment

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Waiver of Interest Under Income Tax Act: Key Provisions & Conditions

Interest and Fee Payable, Tax Ready Reckoner

The Income Tax Act, 1961, allows for the waiver or reduction of interest in certain cases, primarily under Section 220(2A). Below is a detailed breakdown of the rules, eligibility, and process for seeking relief from interest penalties. 🔹 Key Provisions for Interest Waiver 1. Applicable Sections Section 220(2):Imposes 1% monthly interest on unpaid tax demands after 30 days of notice.

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Who Should Claim Refund Under the Income Tax Act?

Refunds, Tax Ready Reckoner

Under the Income Tax Act, 1961, the right to claim a refund depends on who has paid the excess tax and under what circumstances. Here’s a breakdown of who can claim a refund: 1. The Assessee (Taxpayer) Themselves Primary claimant: The person who paid the tax (e.g., through TDS, advance tax, or self-assessment) and is entitled to

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Who Is Entitled to Refund? [Section 237]

Refunds, Tax Ready Reckoner

Under Section 237 of the Income Tax Act, 1961, the following persons are entitled to claim a refund of excess tax paid: 1. Primary Claimant: The Taxpayer (Assessee) Any individual, company, or entity who has paid tax in excessof their actual liability for a given assessment year is entitled to a refund. This includes excess payments through:

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[Section 238]: Can A Person Other Than the Assessee Claim Refund?

Refunds, Tax Ready Reckoner

Yes, under Section 238 of the Income Tax Act, 1961, a person other than the assessee can claim a refund in specific scenarios. Here’s a detailed breakdown: Who Can Claim a Refund Under Section 238? Person Whose Income was Taxed in Another’s Hands (Clubbing Provisions) If income is clubbedunder someone else’s total income (e.g., spouse’s income under Section 64, minor’s

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Form for Claim for Refund and Period Within Which Claim for Refund Should be Made [Section 239 And Rule 41]

Refunds, Tax Ready Reckoner

Under Section 239 of the Income Tax Act, 1961, and related provisions, here are the key details regarding the form for claiming a refund and the time limits for such claims: 1. Form for Claiming Refund Normal Cases (Filed with ITR): If the refund arises from a filed income tax return (ITR), no separate formis required. The refund is processed automatically

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Refund on Appeal, etc. [Section 240]

Refunds, Tax Ready Reckoner

Under Section 240 of the Income Tax Act, 1961, refunds arising from appellate or other proceedings are granted automatically without requiring a separate claim from the taxpayer. Here’s a detailed breakdown: 1. Key Provisions of Section 240 Automatic Refund: If any amount becomes refundable due to an appeal, revision, rectification, or other proceedings(e.g., orders under Sections 154, 263, or

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Withholding of Refund in Certain Cases [Section 241A]

Refunds, Tax Ready Reckoner

Section 241A allows the Income Tax Department to withhold refunds in certain cases, even if a taxpayer is otherwise eligible for a refund. This provision balances taxpayer rights with the government’s need to protect revenue interests. 1. When Can a Refund Be Withheld? The Assessing Officer (AO) may withhold a refund if both of the following conditions are met: A notice

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