Computation of Interest payable to assessee. - Income Tax - 1714/CBDT

INSTRUCTION NO. 1714/CBDT Dated: June 4, 1986 Under section 243 and 244 (1) of the Income-tax Act, 1961, interest is payable to the assessees at prescribed rate when there is delay in issue of refunds. Further, section 244(1A) provides that where any amount has been paid by an assessee after 31.3.1975 in pursuance of any order of assessment or penalty and the assessee has become entitled to refund in respect of such amount as a result of an appeal or other proceedings under the Act, interest becomes payable on the refundable amount from the date the excess amount was paid to the date on which refund is granted. 2. In the course of study conducted by the D.O.M.S., it was noticed that in a number of cases the Income-tax Officers failed to allow interest payable u/s 243 and 244. In order to ensure that there is no omission in allowing payment of interest wherever it is due, it has been decided to prescribe two computation sheets for calculation of interest payable to the assessees. The formats of the computation sheets are given as Annexures-I and II to this letter. The form in the Annexure-I is to be used for computation of interest payable by the Govt. to the assessees in refunds u/s 243 of the Income-tax Act. Similarly, the from in the Annexure-II is to be used for calculation of interest on refunds payable u/s 244(1) and Section 244(1A). These forms for computation of interest payable to the assessees should be brought into use with immediate effect. The above instructions may kindly be brought to the notice of all concerned.