Taxpayers who filed their ITR in July 2026 and are still waiting for refunds may be eligible for interest on the delayed amount. According to Section 244A of the Income Tax Act, 1961, interest eligibility depends on the type of tax from which the refund arises and the filing date. As reported by Mint, Siddharth Maurya, Founder and Managing Director of Vibhvangal Anukulara, explained that a taxpayer is entitled to interest if a refund is granted at a later date when it is already due. For refunds arising from excess TDS, TCS, or advance tax where returns are filed within prescribed due dates, interest is calculated from 1 April of the assessment year until the refund is granted. However, interest is not payable if the refund is less than 10% of the tax determined.
According to the Income Tax Department, refund processing begins after the ITR has been e-verified, with typical processing taking around 4 to 5 weeks for the refund to reach the taxpayer's bank account. However, taxpayers who filed their ITR in July or August for Assessment Year 2026-27 and are still waiting for their refund may face delays due to several factors. As reported by Mint, Siddharth Maurya, Founder and Managing Director of Vibhvangal Anukulara, identified key reasons including the return being under process, differences between income or TDS reported in the ITR and information available with the Department (i.e., Form 26AS, AIS or TIS), tax demand, or issues regarding the bank account through which the refund is to be credited.
The interest rate is 0.5% per month or 6% per annum on the refund amount, calculated as simple interest. According to Isha Sekhri, Founder of Isha Sekhri & Associates LLP, the start date depends on the refund source: for excess TDS/TCS/advance tax filed on or before due date, interest runs from 1 April of the year following the tax year. For excess self-assessment tax, interest starts from the date of filing or payment, whichever is later. Two rounding rules apply: part-month counts as a full month, and the principal is rounded down to the nearest ₹100. The final refund is separately rounded to the nearest ₹10.
Sekhri mentioned several conditions where interest is not payable: when the 10% threshold is not met, regardless of delay; when the delay is attributable to the taxpayer (non-response to notices, failure to cure defects, delay in furnishing bank details); in condonation of delay cases where belated return delays were condoned; and when PAN-Aadhaar linkage is inoperative, which may withhold the refund with no interest for that period. Taxpayers can raise a grievance if the ITR is successfully verified, there are no unresolved actions, and the refund is still not processed. The grievance should include the Assessment Year, ITR acknowledgement number, filing and e-verification date, expected refund amount, and any issues being faced.
Taxpayers should compare the income and TDS details reported on the ITR against Form 26AS, AIS, and TIS to see if there are any differences. Maurya suggested that taxpayers should log in to the e-filing portal to see if the return has been successfully e-verified and processed, and if the return is still showing as 'under processing', they must wait for the processing to be completed. If the intimation shows that a refund is due but no refund is credited, taxpayers must contact the income tax department and verify the bank account details. If the return is still at the e-filing stage, taxpayers may file a revised return to correct errors, with corrections based on actual income and tax records and not increasing the expected refund.
If interest is miscalculated or omitted, taxpayers can file an application under Section 154 of the 1961 Act. If rectification doesn't resolve the issue, they can raise a grievance on the e-Nivaran portal. If unresolved, they can escalate to the Income Tax Ombudsman, citing delay in refund issuance or in disposing of the rectification application. Taxpayers must retain the filed ITR, 143(1) intimation, bank account details, Forms 26AS/AIS/TIS, and communication received from the department, and should retain the grievance number and track the response on the portal.
