Re: refund of tax and Interest

In case of taxpayer, an addition has been made, whereby demand of Rs.10 lakh is raised including interest of Rs.3 lakh. The taxpayer has filed appeal before CIT(A), which is pending as on 31 January 2020. The taxpayer has paid the entire demand including interest due. If the taxpayer settles the matter under VSV Scheme and tax due under VSV is settled against the demand already paid by taxpayer, whether taxpayer will be eligible to get refund of tax (including interest)??

Though taxpayer has paid entire tax and interest, the appeal is eligible for settlement under VSV.  It appears that there will be no separate challan for VSV payment but the same tax payment challan is to be used.  It is likely that direction may be given to the field officers to update the tax records.  

 

Where tax paid (including  interest) is more than amount payable as worked out under VSV, the balance amount will be refunded but no interest u/s 244A of the Act will be eligible – Refer Q5 of the FAQ dt 4 March 2020.

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