Senior citizen wrongly paid tax on Rs 25.42L interest; ITAT orders Rs 9.91L refund
A senior citizen in India successfully challenged a tax assessment after erroneously paying taxes on interest earned from tax-free government bonds. The Income Tax Appellate Tribunal ruled in his favor, noting that the error was apparent from the records and did not constitute a new claim.
Why it matters
The ruling clarifies that taxpayers can seek rectification for obvious errors even after the deadline for filing a revised return has passed, protecting citizens from administrative overreach.
What if you end up paying taxes on a tax-free income? Will you be refunded? In one such case a senior citizen man erroneously ended up paying tax on his interest earnings. A senior citizen living in Gurugram invested Rs 3 crore in two government tax-free bonds in 2013.Here’s what the Income Tax Appellate Tribunal (ITAT) Delhi ruled.What the case is aboutEach year, the senior citizen reported the interest earned from his investments in tax-free bonds under the ‘exempt income’ category in his income tax return (ITR). However, while filing his return for AY 2022-23, he mistakenly treated Rs 25.42 lakh in interest from the bonds as taxable income from other sources.This included Rs 16.96 lakh that he earned from IFCL bonds and he got Rs 8.46 lakh from REC bonds. As a result, he ended up paying Rs 9.91 lakh in income tax.
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