Income Tax Refund:  How to Claim, Track Status, and Maximize Your Refund

An income tax refund arises when the taxpayer pays more tax than the actual tax liability for the financial year. The Income Tax Department allows the taxpayers to claim a refund of the excess taxes paid in the form of TDS, TCS or advance tax by filing an Income Tax Return (ITR). Similarly, once ITR is filed taxpayers can also track and check their refund status online through the e-filing portal and other various means. 

ITR Filing Updates FY 2025-26 (AY 2026-27)

• The CBDT has enabled online and offline utilities for ITR-1, 2 and 4 for FY 2025-26 (AY 2026-27).
• The due date to file ITR-1 & ITR-2 is 31st July 2026.
• The due date to file ITR-3 & ITR-4 (Non-audit cases) is 31st August 2026.

Tips to Claim Maximum Refund

The following things can be kept in mind to claim the maximum refund on filing ITR.

1. Choose the most beneficial tax regime:Calculate the tax payable under the old and the new regime, considering the applicable deductions and exemptions under both the regimes. File your ITR under the regime which has the least tax outflow, this can increase the TDS refund amount.
2. Verify the TDS amount deducted: Usually the TDS amount deducted is auto-populated in your ITR. However, it is necessary to cross verify the particulars of TDS deducted with documents like Form 16, Form 26AS, etc.
3. E-Verify the return: It is important to e-verify your ITR within 30 days of filing. However, it is highly recommended to e-verify your ITR as soon as you have filed the returns. This ensures faster processing of refunds.

What is Income Tax Refund?

An income tax refund is the amount returned by the Income Tax Department when a taxpayer pays more tax than their actual tax liability during a financial year. For example, If the TDS and advance tax paid by Mr. A is Rs. 20,000 and his actual tax liability is Rs. 10,000, the excess Rs. 10,000 will be refunded to Mr. A by the Income Tax Department.

Excess tax may arise due to higher TDS, TCS, advance tax payments, or self-assessment tax paid while filing ITR. The refund is credited to the validated bank account of the taxpayer after the return is processed.

When are you Eligible for a Tax Refund?

A taxpayer is eligible for a tax refund when the income tax paid through TDS, TCS, advance tax or self-assessment tax is greater than the actual tax liability of the tax payer. However, it is mandatory for the taxpayer to file an Income Tax Return (ITR) to claim the eligible tax refund. Failure to file an original return or a belated return by the taxpayer will forfeit any eligible refund and the taxpayer will not be able to claim such amount.

How is Income Tax Refund Calculated?

Mr. A has the following income and deductions for the Financial Year 2025-26 (AY 2026-27)

• Gross Salary: Rs. 20 lakhs
• Interest from Savings Account: Rs. 20,000
• Employer’s Contribution to NPS under Section 80CCD(2): Rs. 50,000
• Taxes already paid: Rs. 1,90,000

Calculation of Income Tax and Tax Liability:

How to Claim Income Tax Refund?

It is necessary to file ITR even when you are statutorily not mandated to file one. Refund can be claimed only on filing ITR. As you report your income for the financial year and TDS already deducted, the income tax utility calculates the tax due, and the refund, if any will be automatically calculated if the TDS deducted is more than the actual tax liability. 

1. Choose the appropriate ITR Form: Depending on your income level, residential status, and the structure of income, you should choose the applicable ITR form for you. Filing under the wrong ITR-form can result in unwanted disclosures, under-reporting of income, and other non-compliances, which can delay the ITR processing and the refund settlement.
2. Determine your actual tax liability: Ensure you accurately disclose all the income, deductions and exemptions in the utility
3. Verify TDS particulars: TDS deducted is auto-populated from the information available with the department. Cross-verify with the information available with you.
4. Report bank details correctly: It is imperative to report all your bank account details accurately, since the refund credit may be delayed or held, if the account is not functional, or if the details entered are invalid.
5. Timely E-verification:  E-verifying the ITR in the soonest possible time enables faster processing of ITR and refund credit.

How to Check Income Tax Refund Status Online for AY 2026-27?

The taxpayer can check their income tax refund status online through various methods after filing their ITR for the respective assessment year. 

1. Check Refund Status through Income Tax e-Filing Portal

One of the prominent means to check income tax refund status is through the income tax e-filing portal. To check income tax refund status through e-filing portal follow the below steps:

1. Visit the income tax e-filing portal.
2. Log in using your PAN and password.
3. Navigate to "e-File" and then select “Income Tax Returns” and “View Filed Returns”.
4. Click View Details for the relevant assessment year.
5. The page will display the refund status of your ITR.

2.  Check Refund Status through NSDL / Protean Portal

Alternatively, Taxpayers can also check the refund status using NSDL e-PAN Protean portal through the below steps:

1. Navigate to the NSDL e-PAN Protean Portal 
2. Enter your PAN number and select the relevant assessment year for which you want to know the refund status
3. Enter the captcha code displayed and click on “Proceed”
4. The website will now display the income tax refund status. 

3. Check Refund Status through TRACES Portal

An alternative method to check income tax refund status is through the TRACES portal through the following steps:

1. Navigate to the income tax e-filing portal
2. Log in using your PAN and password
3. Navigate to “e-File”, click on “Income Tax Returns” and then select “View Form 26AS”
4. You will be redirected to the TRACES portal. Select the box on the screen and click on ‘Proceed’.
5. Click on the link at the bottom of the page, click ‘View Tax Credit (Form 26AS)’ to view your Form 26AS
6. Choose the relevant Assessment Year and set view format as “Text”
7. You'll see the details of 
   1. Any tax refund paid
   2. The credit amount
   3. The date of payment

Taxpayers can use any of the above three methods to check income tax refund status online. 

Income Tax Refund Status Messages - All Statuses Decoded

Once you check the status of your income tax refund, you might be confused about what the current status actually means. 

Income Tax Refund Timeline - How long does it take?

Processing time starts after ITR e-verification (e-verification or ITR-V receipt) and may vary depending on mismatch checks, scrutiny, or refund volume. While simple ITR forms like ITR-1 and ITR-4 are usually processed faster. Form like ITR-2 and ITR-3 may take longer due to additional verification. Pre-validated bank details and error-free filing can speed up refunds.

Why is my Income Tax Refund Delayed?

If the refund credit is getting delayed, in other words, the refund is awaited beyond this time, the following could be the reasons for the same.

1. Enhanced Verification and Delayed ITR Processing

• The income tax returns are processed in a more stringent manner for the current assessment year, compared to preceding assessment years.
• This year, a lot of additional disclosures were mandated for claiming various deductions. Therefore, the department has more database to verify the authenticity of deductions claimed.
• Returns may be processed late if the department suspects an incorrect refund claim. 
• If you have made error in the returns, you can revise it within December 2026 (for FY 2025-26).

2. High Refund Claims

• Taxpayers claiming higher refunds (for example, above Rs. 50,000), or higher refunds than in previous years, are facing delays in refund processing this year. 
• This is because the department is verifying each claim using the expanded database available.

3. Mismatch between returns and Form 26AS/AIS

• Ensure the particulars as mentioned in the returns match with data as per Form 26As or AIS.
• It might be that sometimes details on AIS or Form 26AS is incorrect. Please provide feedback in such situations.

4. Return Filed close to Due Date

• It is always recommended to file your Income Tax returns well in advance, before due date.
• If the returns are filed close to due date, due to high volume of return filing, the refund might be delayed.

5. Bank Account Details

• Check if the bank account details furnished are correct and it is duly pre-validated.
• Check if the bank account is still active. If you have changed the bank account anytime post filing the return, update it on the portal.

6. Pending Notices

• The department has the power to with hold the refund amount if there is any pending demand notices, yet to be resolved.

7. Pending e-Verification

• If the return is filed and pending e-verification, the filing process is incomplete.
• Unless the filing is complete, the refund will not be processed. Therefore, it is advised to E-Verify the returns as soon as the returns are filed in order to speed up the process of refund. 

You can raise a grievance at the income tax portal if there is undue refund delay.

How to Raise Income Tax Refund Reissue Request

If the income tax refund was not credited to you due to various reasons such as incorrect bank details, a closed bank account, or other reasons, taxpayers can request the Income Tax Department to reissue the refund through the following steps:

1. Login to the e-filing portal using PAN and password. 
2. Navigate to the Services menu and select “Refund Reissue” from the dropdown menue.
3. Click on “Create Refund Reissue Request”
4. Identify and select the relevant Assessment Year for which the refund failed and which has to be reissued
5. Select the Assessment Year and click on “Continue”.
6. Bank Account details will appear on the next screen. Update and validate the correct bank account details.
7. Submit the refund reissue request and complete the e-verification.

Section 244A - Interest on Income Tax Refund

If a taxpayer has paid excess tax and the Income Tax Department of India delays the refund, the taxpayer may receive interest on the refund amount. Interest on income tax refund is provided under Section 244A of the Income Tax Act.

The interest is generally calculated at 0.5% per month (6% per annum) on the refund amount. It is calculated from the date of tax payment or from the start of the assessment year, depending on the type of tax paid, until the date the refund is issued.

Mode of Receiving Refund

The Income Tax Department will send the refund amount through electronic mode i.e., a direct credit to the account. Taxpayers have to make sure to provide correct details for their bank account and validate it before filing the ITR. 

Refund Adjusted Against Old Demand

Sometimes the income tax refund might not get credited if the taxpayers has pending previous demand due. The Income Tax Department has the authority to off set the income tax refund against any previous pending demand dues. In such a case, the refund will not be credited to the taxpayers account. 

Is Income Tax Refund Taxable?

No, income tax refund received is not taxable. However, the interest received on the refund amount will be taxable under the head “Income From Other Sources” at applicable income tax slab rate. 

Income Tax Refund Helpline

You can contact the following helpline for any queries regarding income tax refunds. 

• 1800 103 0025
• 1800 419 0025

For International callers the following numbers can be used:

• +91-80-46122000 
• +91-80- 61464700.

You can even send a mail with your refund query to refunds@incometax.gov.in. For any payment-related query, contact the SBI Contact Centre toll-free number at -1800-425-9760.