If you’ve filed your income tax return and are still waiting for your refund, you’re not alone. Many taxpayers in India experience refund delays even months after filing. The good news is that under Section 244A of the Income Tax Act, 1961, the government must pay interest on delayed refunds provided the delay isn’t caused by the taxpayer. The interest rate is fixed at 0.5% per month or 6% per annum, calculated as simple interest on the refundable amount.

Interest begins from the date the refund becomes due until the date it is actually paid. However, this applies only when the delay is from the department’s side. For example, if your refund of Rs 20,000 is delayed by three months, you will receive Rs 300 as interest (20,000 × 0.5% × 3). It’s important to note that this is simple interest, not compounded, so the amount doesn’t grow on previous interest.

There are exceptions where no interest is granted despite a delay. If incorrect details, missing documents, or failure to respond to notices caused the delay, the taxpayer isn’t eligible. Refunds below Rs 100 are excluded, and those arising solely from self-assessment tax under Section 140A do not earn interest.

The Central Board of Direct Taxes (CBDT) also allows corrections to refund errors via Notification No.155/2025, empowering the Centralised Processing Centre (CPC) to fix issues under Section 154 and adjust refunds against pending dues. Refund delays often occur due to mismatches in Form 26AS or AIS, unvalidated bank accounts, or PAN–Aadhaar linkage issues. If your refund or interest is missing, log into the income tax e-filing portal to verify your status. You can request a refund reissue, file a rectification under Section 154, or raise a grievance through the e-Nivaran portal.