Find
Interest on refund under Sec 244A (now Sec 437) is worked out on the refund due, generally at 0.5% a month or part of a month. The adjusted part is treated as paid on the date of adjustment.
ITR
Interest on a refund that was adjusted
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Provisions
Sec 244A, Income-tax Act 1961 (now Sec 437, Income-tax Act 2025); Sec 245, Income-tax Act 1961 (now Sec 438, Income-tax Act 2025)
Analysis
Your intimation shows the refund including interest up to the date of grant or adjustment. Example: refund ₹40,000 for AY 2026-27, adjusted ₹10,000 in December 2026 and ₹30,000 paid in January 2027; interest is computed to those dates. If the demand later turns out wrong and is cancelled, the adjusted amount should be refunded again, normally with interest. Check the interest line in the intimation rather than assuming it.
Close
- Open the latest intimation and the refund status
- Check the refund interest line
- If a wrong demand is later cancelled, ask for refund of the adjusted amount with interest
- Raise a grievance if interest is missing
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