How to Get Your Income Tax Refund — Section 237, TDS Credit, and Section 244A Interest
You are entitled to a refund the moment excess TDS is deducted. Filing your ITR triggers the process automatically. Here is how refunds work, when interest applies, and what to do if yours is stuck.
Harun Raaj
Chartered Accountant · Harun Raaj & Associates
You are entitled to an income tax refund under Section 237 of the Income Tax Act, 1961 whenever the tax paid — through TDS, advance tax, or self-assessment tax — exceeds your actual tax liability for the year. Filing your ITR is the trigger; there is no separate refund application.
How a Refund Arises
The most common cause is excess TDS on salary. Your employer deducts TDS under Section 192 based on an estimated annual salary and the declarations you submit. If you later claim deductions (HRA, 80C, 80D, home loan interest) not fully accounted for by your employer, your actual liability drops and the excess TDS becomes a refund.
Other common sources:
- TDS on FD interest under Section 194A (10% deducted even if your slab rate is lower or nil)
- TDS on dividends under Section 194 (10% on dividends above ₹5,000)
- TDS on rent under Section 194I
- Advance tax paid in excess of final assessed tax
New Income Tax Act, 2025: The new Act, which governs returns from Tax Year 2026-27 (FY 2026-27) onwards, retains the refund entitlement and its interest provisions under equivalent sections. For AY 2026-27 (covering FY 2025-26 income), the Income Tax Act, 1961 governs. The new Act replaces the concept of "Assessment Year" with "Tax Year."
Interest on Delayed Refund — Section 244A
If the Income Tax Department does not process your refund within the prescribed time, you earn interest at 0.5% per month (or part thereof) under Section 244A:
- If the return is filed on or before the due date (31 July 2026): Interest runs from 1 April 2026 to the date of refund grant.
- If the return is filed after the due date: Interest runs from the date of filing to the date of refund grant.
This means filing late costs you the §244A interest for the months between April and your actual filing date. On a ₹50,000 refund, that is ₹250 per month of delay — not catastrophic, but avoidable.
Section 244A interest is taxable in the year of receipt and will appear in your AIS for that year.
Worked Example
Arun has salary income of ₹10,00,000. His employer deducted TDS of ₹1,10,000 under §192. After claiming HRA (₹1,20,000 under §10(13A)), 80C (₹1,50,000), and 80D (₹25,000), his tax under the old regime:
He files on 20 July 2026 (before due date). Refund credited on 5 October 2026.
§244A interest = ₹34,184 × 0.5% × 6 months (Apr–Sep) = ₹1,026.
Steps to Ensure Fast Refund
1. Pre-validate your bank account on the Income Tax portal (My Profile → Bank Account) before filing. Refunds credit only to pre-validated accounts linked to your PAN.
2. Cross-check AIS and 26AS before filing. Any mismatch between the TDS you claim and what the portal shows triggers manual review under §143(1), delaying the intimation and the refund.
3. Ensure PAN-Aadhaar linking is complete. Unlinked PANs cause inoperative status under the proviso to Section 139AA — TDS is charged at higher rates and refunds are held.
4. E-verify within 30 days of filing. Under Rule 12 of the IT Rules (as amended), an unverified return is treated as not filed. Refund processing does not begin until verification.
5. Use correct IFSC and account number. A single digit error in bank details causes a failed credit, requiring a Refund Re-issue request — adding 2–4 weeks to the timeline.
Processing Timeline
After e-verification, your return is processed under Section 143(1). The intimation order under §143(1) is the refund order.
What to Do If Your Refund Is Stuck
- Check status at incometax.gov.in → e-File → Income Tax Returns → View Filed Returns → select AY → check refund status.
- If intimation is issued but refund not credited: Bank account mismatch. Raise Refund Re-issue request on the portal (e-File → Refund Reissue).
- If no intimation after 90 days: Raise a grievance under e-Nivaran on the portal (Grievance → Submit Grievance → Refund Not Received).
- If a demand appears instead of refund: The department may have offset your refund against an outstanding demand under Section 245. They must issue a notice before adjustment. File a response on the portal agreeing or disagreeing with the demand.
Frequently Asked Questions
I filed ITR in July — when will I get my refund? Typically within 4–6 weeks of e-verification if there are no AIS mismatches or defects. Track in real time at the portal under View Filed Returns.
The portal shows refund "failed" — what does this mean? Your bank account details are incorrect or the account is not pre-validated. Log in to the portal, go to My Profile → Bank Account, add correct details, pre-validate, then raise a Refund Re-issue request.
Can the department adjust my refund against an old demand without telling me? No — under §245, the department must issue a notice proposing the adjustment. You have 30 days to respond. If you disagree with the old demand, file your objection immediately.
Will I get Section 244A interest if my refund is delayed? Yes — the interest is mandatory and must be included in the intimation under §143(1). If your intimation shows the correct refund without §244A interest and the credit was delayed, the additional interest will be paid along with the refund.
I made an error in my return and my refund is lower than expected. Can I revise it? Yes — a revised return under Section 139(5) can be filed any time before 31 December 2026 for AY 2026-27. File the revised return and the updated §143(1) intimation will reflect the corrected refund.
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Want a CA to reconcile your TDS credits and ensure your full refund reaches you? File your ITR with Harun Raaj & Associates →
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See Also
Frequently Asked Questions
How do I claim my income tax refund if I paid excess TDS on salary?+
You are entitled to a refund under Section 237 of the Income Tax Act, 1961 whenever tax paid through TDS exceeds your actual tax liability. File your ITR with all applicable deductions (HRA under Section 10(13A), 80C, 80D, home loan interest) claimed; there is no separate refund application required. The ITR filing itself triggers the refund process.
What is the interest rate on delayed income tax refunds and when does it start accruing?+
Under Section 244A, the Income Tax Department must pay interest at 0.5% per month (or part thereof) on delayed refunds. If you file your return on or before the due date (31 July 2026), interest runs from 1 April 2026 to the refund grant date. If filed after the due date, interest runs from your actual filing date to the refund grant date.
Which types of TDS trigger income tax refunds most commonly?+
The most common sources of refunds are: excess TDS on salary under Section 192; TDS on fixed deposit interest under Section 194A (10% deducted even if your tax slab is lower or nil); TDS on dividends under Section 194 (10% on amounts above ₹5,000); and TDS on rent under Section 194I. Advance tax paid in excess of final assessed tax also generates refunds.
Is Section 244A interest on income tax refunds taxable income?+
Yes, Section 244A interest is taxable in the year of receipt. It will appear in your Annual Information Statement (AIS) for that financial year and must be reported as income.
How much Section 244A interest do I lose by filing my ITR after the due date?+
Under Section 244A, filing after the due date (31 July 2026) costs you interest for the months between 1 April 2026 and your actual filing date. At 0.5% per month, each month of delay equals 0.5% of your refund amount; for example, a ₹50,000 refund costs ₹250 per month of late filing.
Will the new Income Tax Act 2025 change how refunds and Section 244A interest work?+
The new Income Tax Act, 2025 retains refund entitlements and Section 244A interest provisions under equivalent sections, effective from Tax Year 2026-27 (covering FY 2025-26 income onwards). For AY 2026-27, the Income Tax Act, 1961 still governs. The new Act replaces 'Assessment Year' with 'Tax Year' but the refund mechanism remains unchanged.
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