RBI has released a Notification on interest rates on two popular Tax saving schemes WEF 01.04.2014. These schemes are Public Provident Fund Scheme 1968 and Senior Citizens Saving Scheme 2004. PPF is most popular tax saving scheme among small investor as interest from PPF account is exempted from income tax. SCSS scheme is useful for senior citizens either having income less than exemption limit or falling under first slab of income tax rates.
Income tax - Whether interest obligation arises for the Revenue in every case where excess tax paid by assessee has been retained by the State for its own enjoyment - YES: Supreme Court
THE issues before the Apex Court are - Whether the statutory obligation to refund carries with it the right to interest also; Whether when the assessee deposits tax as per an order passed u/s 195(2), the Revenue is under obligation to pay interest on refund processed as per the appellate order and Whether interest obligation arises for the Revenue in every case where excess tax paid has been retained by the State for its own enjoyment. And the verdict goes against the Revenue.
tax 'N' accounts people
Tarun Kumar Gupta
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