ITAT: Interest on Income Tax Refund is Taxable Under ‘Income from Other Sources’

The Income Tax Appellate Tribunal (ITAT) clarified that interest received on income tax refunds is not tax-exempt and must be declared under the head “Income from Other Sources” in ITR. The tribunal observed that such income accrues from the Government and is distinct from the refund amount itself. Taxpayers failing to disclose this may attract penalties under Section 270A of the Income Tax Act.