Why Your Income Tax Refund Is Delayed: Know When the Government Pays Interest on Late Refunds
Filed Your ITR on Time but Haven’t Received a Refund Yet? Here’s What Happens If the Government Delays It
The deadline for filing the Income Tax Return (ITR) for the financial year 2024–25 has passed, yet many taxpayers are still waiting for their refunds. This delay often raises one common question — if the government delays issuing the refund, does it also pay interest on the pending amount? The short answer is yes, but there are specific conditions that determine who qualifies for it and from when the interest is calculated.
When Does the Government Pay Interest on Refunds?
Under Section 244A of the Income Tax Act, the government is liable to pay interest to taxpayers if the refund is delayed beyond the prescribed time frame. However, the calculation of interest depends on when you filed your return and the reason for the delay.
If you filed your ITR for FY 2024–25 within the due date (September 16, 2025), the government must pay you interest starting from April 1, 2025, until the date the refund is credited to your account.
However, if you filed your return after the due date, the interest will be calculated from the date of filing rather than April 1. That means taxpayers who submitted their returns late will receive less interest because the interest period starts later.
How Much Interest Does the Government Pay?
The rate of interest on delayed refunds is 0.5% per month (or 6% per annum) on the refund amount. This interest is applicable on any excess tax paid, such as through TDS (Tax Deducted at Source), advance tax, or self-assessment tax.
For instance, if your refund of ₹20,000 is delayed for four months, the government owes you an additional ₹400 as interest (₹20,000 × 0.5% × 4).
Situations Where You Won’t Receive Interest
Interest is not automatically guaranteed in every case of delay. If the delay is caused by incorrect information provided by the taxpayer, such as wrong bank details, incomplete documentation, or errors in the ITR form, the government is not liable to pay interest.
But if the delay occurs due to processing issues or administrative delays from the Income Tax Department’s side, then taxpayers are entitled to receive interest on their pending refunds.
How to Check Your Refund Status
If you’re still waiting for your refund, it’s easy to check the current status online.
Follow these steps:
-
Visit the official Income Tax e-Filing portal (https://www.incometax.gov.in)
-
Log in using your PAN number and password.
-
Go to the ‘Check Refund Status’ section.
-
Enter your assessment year and view the refund details.
If there’s an issue such as incorrect bank details, account mismatch, or processing error, you can raise a query directly through the portal or contact the Centralized Processing Centre (CPC) or your Assessing Officer (AO) for assistance.
What If the Refund Is Taking Too Long?
Refunds are typically processed within a few weeks of filing, but in some cases, they may take longer due to verification delays or high processing volume. If your return has already been processed and the refund has not been credited yet, double-check your bank account linkage with PAN and pre-validation status.
In case everything appears correct but the refund is still pending, contacting the Income Tax helpline or CPC is the next logical step.
Final Thoughts
Timely ITR filing not only helps you avoid penalties but also ensures quicker processing of refunds. And if there’s a delay caused by the government, you are entitled to receive interest on the pending amount under Section 244A.
However, remember that errors in filing or incomplete details can lead to both delays and loss of interest. To avoid such hassles, always verify your return details, bank account, and contact information before submission.
So, if your refund hasn’t arrived yet, don’t panic — check your refund status online, confirm your bank details, and rest assured that if the delay is on the government’s end, your money is growing with interest.
