Section 244A of the Income Tax Act
Income-tax Act, 2025: s.437
Section 244A of the Income-tax Act, 1961 corresponds to section 437 (Interest on refunds) of the Income-tax Act, 2025.
Read section 437 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 244A is ITO v. Daga Capital Management (P) Ltd. (117 ITD 169), cited in 151 of the 1,186 judgments on BharatTax that turn on this section.
Leading authorities on Section 244A
Club membership fees, including both entrance fees and annual subscriptions, are not considered capital expenditure if the membership's continuance depends on regular payments, and therefore are allowable as revenue expenditure under Section 37(1).
Income earned during the project construction stage, which has a direct nexus or is inextricably linked to the project's setting up, constitutes a capital receipt not liable to tax and reduces the project cost.
Foreign Tax Credit (FTC) is allowable even if no tax is paid in India on the corresponding income due to deductions under sections 10A or 10AA, or losses in other units. The scope of income eligible for deduction under Section 10AA includes interest on deposits and realized gains on forward contracts.
Payments for web hosting services, including data back-up, maintenance, security, and uninterrupted services, are not taxable as royalty under Section 9(1)(vi) of the Income Tax Act, as they do not constitute 'consideration for use of, or right to use, scientific equipment'.
Expenditure incurred by an assessee in relation to income not forming part of the total income is not deductible under Section 14A(1). The disallowance must be restricted to direct and indirect expenses having an approximate connection with the earning of such exempt income, and Rule 8D applies from Assessment Year 2008-09.
Assessees are entitled to compensation for the inordinate delay by the Income Tax Department in refunding excess tax, which includes interest on the statutory interest due under section 244A for such delayed refunds.
The Department has a moral and legal obligation to refund excess tax collected from taxpayers, along with interest. An assessee is entitled to interest on the amount of taxes refunded, including interest on interest, as per Section 244A of the Income-tax Act.
Income is recognized when it is absolutely ascertained, determined, and specified, conferring an exclusive right of receipt upon the assessee, irrespective of the accounting period.
A partner's contribution of a personal asset to a partnership firm does not amount to a "transfer" for capital gains purposes under the Income-tax Act, as the consideration (the partner's interest in the firm) is indeterminate, and the computational machinery for capital gains fails.
