Where refund of any amount becomes due to the assessee under the Income tax Act, he shall be entitled to receive, in addition to the said amount simple Interest on the refund as per following calculations:

Where the refund is out of any Tax deducted at source/ tax collected at source or advance tax paid during the financial year, interest will be paid at the rate of 0.5%, or part of the month from the period starting from 1st April of the assessment year till the date on which such refund was granted.

In other cases interest shall be paid @0.5% for every month or part of a month for the period commencing from the date of payment of tax or penalty to the date on which such refund in granted.

Section 244A as per the latest amendment states that Interest @ 0.5% for every month or part of the month shall be payable where refund of any amount of Fringe Benefit Tax paid by the way of advance tax becomes due.

Similarly interest @ 0.5% for every month or part of the month shall be payable in any other case for the period(s) from the date(s) of payment of tax/ penalty to the date on which such refund in granted.

No interest shall be payable if the amount of refund is less than 10% of the tax determined U/s 143(1) in Case I

Similarly no interest shall be payable if the amount of refund is less than 10% of the tax determined U/s 115WE(1) in Case II

Interest received on such refund granted is chargeable to tax under the Income from Other Sources.