Delhi: The finance ministry has cut the interest
rate on tax refunds to 6 per cent per year from the
existing 8 per cent.
means it may now not be profitable for corporate treasurers
to deploy surplus cash by way of making liberal advance
tax payments in the hope of obtaining a high return
through subsequent refunds.
the government has also reduced the interest chargeable
by assessees on the overdues. The interest on such overdue
amounts will be charged at 12 per cent against 15 per
new rates, effective from September 8, have been applicable
following the promulgation of the Taxation Laws (Amendment)
Ordinance, 2003, amending the concerned provisions of
the Income Tax Act, the Wealth Tax Act and the Expenditure
ordinance has also inserted a new Section 10BA in the
I-T Act to provide for a deduction of 100 per cent of
the profits derived from export of wood-based handicraft
items. It has also included shipbreaking in the exempted
category for the purpose of Section 10(15)(iv) in respect
of interest payable outside India.