ITR Filing 2025: The Central Board of Direct Taxes (CBDT) has increased the deadline for filing income tax returns (ITR) for FY 2024-25 (Assessment Year 2025-26). Now it will be 15 September 2025 instead of 31 July. This means that taxpayers will get additional 46 days to file returns. At the same time, taxpayers who have to get income tax refund can also get additional benefits in the form of interest. However, this benefit will depend on certain conditions.
Who gets interest on tax refund?
If a taxpayers pay more tax than their real liability, then there is a provision to give interest with refund as well. No matter what tax is there. Such as tax deduction at source (TDS), tax collection at source (TCS), or Advance Tax. Under Section 244A of the Income Tax Act, the taxpayer gets interest from the tax department at the rate of 0.5% month.
However, this interest will be received only when the refund amount is more than 10% of the total tax payment. Now as if you paid a total of ₹ 50,000 tax in the whole year and now you are getting ₹ 4,000 refunds. Since ₹ 4,000 your total tax amount is only 8% of ₹ 50,000, you will not get any interest on this refund.
But if the amount of refund would have been ₹ 6,000, which is 12% of ₹ 50,000, then in this case you will get interest on that ₹ 6,000. It is also worth noting that interest on refund will be added to the next financial year earnings as ‘Income from Other Source’ according to the Income Tax Act.
When and how will interest be paid?
The date of filing ITR and getting refund process affects when the taxpayer will get interest. If the return is filed on or before 15 September 2025 (new deadline) or before, the interest will be calculated from 1 April 2025 till the refund is issued. If the return is filed late, the interest will be available only from the date of filing to the refund.
How much interest will be available on refund?
Now suppose you have to get a refund of ₹ 35,000. If you filed the return on 10 September 2025 and the refund was released on 30 September, the interest will be 6 months from April 1 to September 30:
₹ 35,000 × 0.005 × 6 = ₹ 1,050
But, if the return was filed on 15 July 2025 and the refund came on 31 July, the interest will be 4 months:
₹ 35,000 × 0.005 × 4 = ₹ 700
Should ITR filing be avoided only for interest?
According to the tax expert, it is not prudent to deliberately delay the return filing, as the amount of additional interest is modest.
On the contrary, filling the return quickly not only provides refunds quickly, but the option to revise for free in time is also open. If you get refund quickly, you can use it elsewhere and earn more than the interest received from the tax department.
How much will the burden increase on income tax depot?
In FY 2024-25, by 31 March 2025, ₹ 1.9 lakh crore refunds were issued to non-corporate taxpayers such as individuals and HUFs. This figure was ₹ 1.57 lakh crore in the last year i.e. fY 2023-24.
Increasing the deadline for ITR filing may increase interest payment, but the tax department has already included this additional expenditure in its assessment. However, it is necessary to remember that interest will be paid only in the cases where the refund claim has been found to be valid.
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