Earn interest up to 7.75% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)

When claiming a refund on taxes, you qualify for interest on the excess amounts under Section 244a. If tax collected at source (Section 206C)/deducted at source (Section 199) results in excess tax, you can receive 1.5% interest on the extra amount, under 244a, from – (a) April 1st of the assessment year, till the refund initiation date, or (b) from the date of income tax returns submission, to the date when the refund is granted.

 

Suppose an excess tax is generated by self-assessment tax, you can receive 244a interest of 1.5% per month, from the date of income tax returns submission to the date when the refund is granted. If the excess tax amount is not due to tax collected/deducted at source, nor self-assessment, you can receive interest of 1.2% per month under Section 244a.

 

Eligibility Criteria for Claiming 244A Deduction

 

To be eligible for claiming 244a interest on your excess tax amount, the following criteria must be met:

 

  • You must be an individual taxpayer.

 

  • If you are a resident Indian or non-resident Indian, you are eligible for the prescribed interest rate on your excess tax amount.

 

  • Interest claimed on excess tax amounts under section 244a are applicable only for the current fiscal year.

 

TDS under Section 244A of the Income Tax Act

 

The TDS rates, as per the Income Tax Act are as follows:

 

Section

Particulars

Tax Rate

192

Salary Payment

Normal Slab Rate

192A

Payment pertaining to accumulated provident fund balance

10%

193

Interest earned on securities

10%

194

Income received on dividends

10%

194A

Interest earned apart from that on securities

10%

194B

Income from lottery, crossword puzzles, card games and other games winnings

30%

194BB

Income from Horse race winnings

30%

194C

Payments made to a contractor/sub-contractor

1-2%

194D

Commission on Insurance

5%

194 DA

Life insurance policy payments

5%

194EE

National Savings scheme payments

10%

194F

Repurchase of units by Mutual Funds/Unit Trust of India – payments

20%

194G

Sale of lottery tickets – commission received

5%

194H

Brokerage and commission

5%

194K

Income pertaining to units payable to a resident person

10%

194LA

Acquisition of certain immovable property – commission payment

10%

194LBA(1)

Interest amounts paid by a business to its unit holders by renting/leasing property

10%

194LBB

Payment to a unit holder by an Investment Fund

10%

194LBC

Income earned from a securitization fund

25%

194M

Commission, brokerage, fees, paid to a resident by an individual/UF

5%

194N

Cash withdrawal during the previous year from 1 or more accounts maintained with a banking company, co-operative society

2%

194O

Amount received by an e-commerce operator

1%

194P

Tax deductions by a bank for senior citizens over the age of 75

Tax on total income as per rate in force

194Q

Payments made for the purchase of goods above Rs. 50 Lakhs

0.1%

 

 

Deductions and Exemptions

 

In the case of excess tax amounts resulting from tax collected or deducted at source, you will receive 1.5% as 244a interest on the extra amount, every month, from the date of submission of returns to the refund date.

 

In the case of excess tax amounts resulting from self-assessment tax, you will receive 1.5% as 244a interest on the extra amount every month from submitting returns to the refund date.

 

If the excess tax amount isn't a result of the above two cases, you will receive an interest of 1.2% every month, under Section 244a, from the date you submit your income tax returns to when your refund is granted.

 

Conclusion

 

While paying taxes every year is an essential task every citizen who qualifies must undertake; it is equally financially prudent to make sure that you seek all the deductions possible. In the process of doing so, it is of vital significance that you also access the interest you are eligible for on any excess tax amounts, under Section 244a, so that you may provide a more secure financial future for yourself and your loved ones.

 

FAQs

  • ✔️If I have paid excess taxes, will it be refunded to me?

    Yes, if you have paid extra taxes, it will be refunded. To do so, you will first have to file your income tax, post which the returns will be processed. If there is any excess tax amount you have filed, the government will make sure it refunds the same to you through the Electronic Clearance Service, in addition to paying you interest under 244a. 

  • ✔️Do I have to submit any documents as proof while filing my income tax returns?

    Yes, while filing your income tax returns, you must submit certain documents, such as your Income Tax login details, Form 16, Form 16A, Form 26AS, Capital Gain Statement, details of your Aadhar and PAN card, details of your bank account, and statements, and tax savings proof.

  • ✔️Does the Income Tax Department pay interest on refund amounts?

    Yes, the Income Tax Department does pay interest on refunded amounts, under Section 244a.

  • ✔️Under what circumstances can I claim interest on refund under Section 244A of the Income Tax Act?

    You can claim interest on your refund under Section 244a when your tax paid exceeds your tax liability owing to TCS, TDS, self-assessment, and advance taxes paid.

  • ✔️What is the interest rate provided on excess taxes paid under Section 244A?

    Based on the criteria you meet, a simple interest formula is applied on excess taxes paid, with interest rates ranging from 1.5% to 1.2%.

Happy Customers of Finserv MARKETS

Getting a loan to take care of my wedding and relieving my parents to enjoy the occasion was the best decision I ever made. Easy-to-apply, amazing interest rate and quick disbursal, what more can one ask for!

I am passionate about the vehicle I drive and hence I wan't to protect it with the best available option. What amazed me about Bajaj Finserv Markets was full transparency, quick quotes and the attractive discount on the premium while choosing annual payment option!

Check your personal loan eligibility in seconds!

My husband and I will finally move into our own house this Diwali. All thanks to Bajaj Finserv – Markets, with competitive interest rates, minimal processing fees and easy to repay EMIs, our dream saw the light of reality in no time!

Get the best FD interest rates starting @ 8.40%. Let's start!

Kids grow up fast and to fulfill their dream trip to Disneyland I had everything but instant funds. With no collateral or guarantor required and a hassle-free processing, I gifted my family a memorable trip to Paris just at the click of a mouse!

Get sum insured up to 1 Crore! Let's start!

The best way to start looking for health insurance is not a 60 minute meeting with an insurance sales person but with a close study of my coverage needs and checking the insurance company's claim ratio. No unnecessary jargons, easy to apply claims process and choice of premiums, what else could I have asked for as a newbie!

Zero additional charge on part-payment option on Business loans! Let's start!

I bought my first iPhone using my Bajaj Finserv EMI Network Card. Zero downpayment, No cost EMI on Bajaj Finserv Markets EMI store and the smile on my dad's face just made my day!

Get home loan sanctioned online in 72 hours! Let's start!