Income-tax Act, 1961Section 234D
- 0.5% per month on refund found excess on assessment
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 234D
InterestSection 234D → Section 426
Interest on excess refund granted at processing
Section 234D of the old Income-tax Act, 1961 · new section 426 under the Income-tax Act, 2025
New reference Section 426
Income-tax Act, 2025Section 426
- Same, now section 426
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Renumbered.
Practice notes
- Interest paid to the assessee on that refund is also adjusted.
Frequently asked
What is section 234D called in the new Income Tax Act 2025?
Section 426: interest on excess refund.
What is section 234D called in the new Income-tax Act, 2025?
Section 234D of the Income-tax Act, 1961 corresponds to Section 426 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).
What changed in section 234D under the new Income Tax Act?
Renumbered.
Is section 234D still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 234D of the 1961 Act. Section 426 of the 2025 Act applies from tax year 2026-27.