Income Tax Refund - Meaning & How to Check Refund Status For FY 2025-26

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. This excess payment may occur due to higher TDS deductions, advance tax payments, or self-assessment tax paid while filing the income tax return (ITR). Taxpayers can claim the refund while filing their ITR and track the income tax refund status online through the income tax e-filing portal.

Income Tax Refund Key Highlights

• Income tax refund occurs when tax paid exceeds actual tax liability.
• Refunds can arise due to excess TDS, advance tax, or self-assessment tax.
• Refunds are credited after the income tax return is processed and verified.
• Taxpayers can check refund status online through the e-filing portal.

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 deductions, 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.

How to Claim Income Tax Refund

For a taxpayer to claim income tax refund, it is important to file income tax return within the specific due date. If the taxpayers fails to file ITR, then any refund due will not to credited to the taxpayer. Thus, loosing out on the entire tax refund. 

However, income tax refund arises when the tax paid is more than the actual tax liability and will be available only after the ITR filed is processed. 

How to Check Income Tax Refund Status for FY 2025-26

Taxpayer can check their income tax refund status online through the Income Tax e-filing portal. Follow the below steps to check income tax refund status:

Step 1: Visit the income tax e-filing portal.

Step 2: Log in using your PAN and password.

Step 3: Navigate to "e-File" and then select “Income Tax Returns” and “View Filed Returns”.

Step 4: Click View Details for the relevant assessment year.

Step 5: The page will display the refund status of your ITR.

Alternatively, you can also check the refund status using NSDL e-PAN Protean portal by entering your PAN and assessment year.

Income Tax Refund Processing Time

Income tax refund typically taxes around 4-5 weeks to get processed and credited to the bank account. 

Income Tax Refund Status Meaning

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

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.

Reasons for Income Tax Refund Delay

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 2025 (for FY 2024-25).

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.

Example of Income Tax Refund Calculation

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:

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. 

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.