Amendment of section 244A.
93. In section 244A of the Income-tax Act,––
(a) in sub-section (1), in clause (a), after sub-clause (ii), the following proviso shall be inserted with effect from the 1st day of October, 2023, namely:––
“Provided that where refund arises as a result of an order passed by the Assessing Officer in consequence of an application made by the assessee under sub-section (20) of section 155, such interest shall be calculated at the rate of one-half per cent. for every month or part of a month comprised in the period from the date of such application to the date on which the refund is granted;”;
(b) in sub-section (1A), the following proviso shall be inserted, namely:––
“Provided that where proceedings for assessment or reassessment are pending in respect of an assessee, in computing the period for determining the additional interest payable to such assessee under this sub-section, the period beginning from the date on which such refund is withheld by the Assessing Officer in accordance with and subject to provisions of sub-section (2) of section 245 and ending with the date on which such assessment or reassessment is made, shall be excluded.”.
Notes on Clauses:
Clause 93 of the Bill seeks to amend section 244A of the Income-tax Act relating to interest on refunds.
It is proposed to amend clause (a) of sub-section (1) of the said section to insert a proviso to provide that where refund arises as a result of an order passed by the Assessing Officer in consequence of an application made by the assessee under sub-section (20) of section 155, such interest shall be calculated at the rate of one-half per cent. for every month or part of a month comprised in the period from the date of such application to the date on which the refund is granted.
This amendment will take effect from 1st October, 2023.
It is further proposed to insert a proviso to sub-section (1A) of the said section to provide that where proceedings for assessment or reassessment are pending in respect of an assessee, in computing the period for determining the additional interest payable to such assessee under this sub-section, the period beginning from the date on which such refund is withheld by the Assessing Officer in accordance with and subject to provisions of subsection (2) of section 245 and ending with the date on which such assessment or reassessment is made shall be excluded.
This amendment will take effect from 1st April, 2023.
