Income Tax Refund Status: Timeline, Interest and Failed Refunds

Filed and e-verified your return, and now waiting for the money? Refunds usually land within two to six weeks of e-verification, and interest accrues on delayed refunds. This guide explains the refund lifecycle, where to track it, how the interest is computed for AY 2026-27, and what to do when the credit fails.

New law note: From 1 April 2026, the Income-tax Act, 2025 replaces the Income-tax Act, 1961. Returns for FY 2025-26 (AY 2026-27) are still filed under the 1961 Act with ITR-1 to ITR-7, so the section numbers used in this guide remain the ones for that filing. From tax year 2026-27, provisions carry new numbers (for example, Section 80C becomes Section 123 and Section 87A becomes Section 156) and key forms change (Form 16 becomes Form 130 and Form 26AS becomes Form 168), while proceedings for earlier years continue under the 1961 Act. See the complete mapping in our Income-tax Act 2025 section and form mapping guide.

The refund lifecycle

After you e-verify the return, the Centralised Processing Centre (CPC) processes it and issues an intimation under Section 143(1) (Section 270 of the Income-tax Act, 2025). If the tax paid through TDS, advance tax or self-assessment exceeds the computed liability, the intimation confirms a refund and it is pushed to your prevalidated bank account.

Where to check the refund status

• On the e-filing portal: Services, then e-Refund Status, or open e-File, View Filed Returns to see processing and refund stage against each assessment year.
• On the Protean (formerly NSDL) refund tracker: enter PAN, assessment year and the captcha to see whether the refund has been credited or returned.
• For international status or legacy years, the State Bank of India refund banker portal shows the refund sequence.

Typical timelines run from about two weeks to six weeks after e-verification, though complex returns, e-campaign notices or pending responses can stretch it further. Returns flagged for high-value deductions or awaiting a Section 245 decision sit the longest, so keep an eye on the e-Proceedings tab while you wait.

Interest on refunds: Section 244A (renumbered under the Income-tax Act, 2025)

The department pays simple interest on refunds at 0.5% per month, or 6% per annum, provided the refund is at least 10% of the tax determined. If the return is filed on or before the due date, interest runs from 1 April of the assessment year to the date the refund is granted; for late-filed returns it runs from the date of filing. The interest shows up in the intimation and arrives with the refund, so there is no separate claim to make; it is taxable as income from other sources in the year of receipt.

Why refunds fail and how to fix them

Wrong or unvalidated bank account

The most common failure is a bank account that is not prevalidated — the penny-drop test failed, or the PAN-name match with the bank record did not succeed. Open the portal’s profile page, add the correct account, complete prevalidation, and then raise a refund re-issue request through View Filed Returns for the relevant assessment year. The refund is reprocessed to the validated account.

Refund adjusted against an old demand

Under Section 245, an unpaid demand from an earlier year can be set off against your current refund. The intimation offers a response window — commonly 30 days from the notice, with portal prompts sometimes showing 21 days — so reply before the earliest date shown. Agree if the demand is genuine, or attach proof and disagree if it is wrong, already paid or under appeal; a pending appeal usually protects the refund until the appeal is decided.

Refunds for AY 2026-27: the current season

Returns for AY 2026-27 can still be filed late until 31 December 2026, and a belated or revised filing still earns Section 244A interest — from the date of filing rather than from 1 April of the assessment year. Compare Form 26AS (Form 168 from tax year 2026-27) and AIS with the TDS claimed before filing, because a mismatch is the surest way to lose weeks in e-campaign correspondence. Where a refund was adjusted under Section 245 in an earlier year and the demand has since been settled, the position can be corrected through the pending demand response or a revised return, as applicable.

Key takeaways

• Track refunds on the e-filing portal’s e-Refund Status and the Protean tracker using your PAN.
• Expect credit within roughly two to six weeks after e-verification for AY 2026-27.
• Section 244A interest is 0.5% per month (6% a year) when the refund is 10% or more of tax determined.
• Failed credits are fixed by prevalidating the bank account and raising a re-issue request online.
• Reply within the Section 245 window to stop an incorrect adjustment of your refund.

Frequently asked questions

How long does an income tax refund take for AY 2026-27?

Most refunds are credited within two to six weeks after the return is e-verified and processed. Delays usually trace to pending e-campaign responses, defective notices or a failed bank validation.

Why is my refund less than the TDS I claimed?

The intimation may have reduced your claim after matching Form 26AS and AIS, or part of the refund was adjusted against an old demand under Section 245. Read the intimation’s computation annexure and respond if you disagree.

What happens if the refund went to a closed account?

The credit bounces back and the status shows refund failed. Prevalidate a live savings account in your name with a PAN-name match, then raise a refund re-issue request on the e-filing portal.

Do I pay tax on the interest I receive with a refund?

Yes. Section 244A interest is taxable under income from other sources in the year you receive it, and it is already reflected in the intimation computation.

Can I estimate my refund before filing?

Compute your total tax with the income tax calculator, compare it with TDS and advance tax paid, and the difference approximates your refund. A tax professional can review the mismatch causes before you file, and the PAN card service helps if your bank records need a PAN-name correction first.

Disclaimer: Tax laws change frequently. Verify current rates and deadlines on the official portals (incometax.gov.in, gst.gov.in) or consult a qualified professional before acting.