Extension of the due date for filing Income Tax Returns (ITRs):
The Central Board of Direct Taxes (CBDT) has vide Press release dated 27th May 2025 extended the due date for filing Income Tax Returns (ITRs) for Assessment Year 2025-26 from 31st July 2025 to 15th September 2025. This decision has been taken in view of significant structural and content changes in the ITR forms, which require additional time for system development and utility integration. Moreover, with TDS credits expected to reflect only in early June, the effective return filing window was limited. The extension aims to ensure a smooth and accurate filing process while addressing stakeholder concerns. It is expected that a formal notification would follow.
Interest on refund u/s Section 244A:
As per the provisions of Section 244A of the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’), where refund of any amount becomes due to the assessee, he shall be entitled to receive, in addition to the said refund amount, simple interest thereon at the rate of 0.5% for every month or part of the month.
The possible scenarios would be:
> Assessee has filed his ITR within due date: Interest on refund will be receivable from April 1 following the relevant financial year to the date on which the refund is granted by the IT Department.
> Assessee has filed his ITR after the due date: Interest on refund will be receivable from the date of furnishing ITR to the date on which refund is granted by the IT Department.
In furtherance to the press release dated 27th May 2025, the CBDT has issued Circular No. 6 of 2025, also dated 27th May 2025, clarifying that the due date under Section 139(1) of the IT Act stands extended from 31st July 2025 to 15th September 2025. Accordingly, where an assessee furnishes their return of income on or before 15th September 2025, such return will be treated as filed within the time allowed under Section 139(1). As a result, interest under Section 244A on eligible refund amounts will be payable from 1st April 2025 even if the return is furnished after 31st July 2025 but within the extended due date of 15th September 2025.
Interest received on income tax refund is taxable in the hands of all categories of taxpayers. Such interest is granted under Section 244A of the IT Act and is chargeable to tax under the head “Income from Other Sources” in the year in which it is actually received, irrespective of the assessment year to which the refund pertains. Accordingly, taxpayers are required to report this interest income in their return of income and discharge the applicable tax liability thereon.
Table showing the tax refund interest amount if the ITR is filed on September 15, 2025 and it is processed on October 1, 2025 and the tax refund is issued:
Scene 1: Tax refund Rs 25,000
Scene 2: Tax refund Rs 50,000
Scene 3: Tax refund Rs 1 lakh
Scene 4: Tax refund Rs 1.5 lakh
Scene 5: Tax refund Rs 2 lakh
| Scenarios | 1 | 2 | 3 | 4 | 5 |
| Tax Refund | 25,000 | 50,000 | 1,00,000 | 1,50,000 | 2,00,000 |
| Interest | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% |
| Months
(Apr ’25 to Oct ’25) |
7 | 7 | 7 | 7 | 7 |
| Refund Amount | 875 | 1,750 | 3,500 | 5,250 | 7,000 |
Note: The above computation assumes that the refund has been issued in the month of October 2025 and the taxpayer furnishes the return on or before 15th September 2025.
Author Bio
Senior Citizen is not required to pay Advance Tax. Hence there is no liability of interest on Self-Assessment Tax while filing ITR before the due date of 31st July. Now, can we pay the Self-Assessment Tax with no interest till the extended date of 15th Sep. for filing of ITR?
Kindly Clarify.