Income Tax Refund Delay: How Much Interest Will Salaried Individuals Get On Late Payment Of ITR Refund

Every year taxpayers file their income tax returns for a respective financial year before deadline. Eventually, when tax paid amount exceeds the actual due amount, taxpayers are eligible for receiving a refund of the excess amount. In general terms, the Income Tax department credits the ITR refund before the end of a fiscal. However, for financial year 2024-25, the department has announced delay in refunding ITR.

As per the latest update, the process could be completed by end of December. However, did you know the IT department is liable to pay a certain interest for delaying your ITR refund.

How Much Interest You Will Get If Your ITR Refund Is Delayed?

1. Under the section 244A of the IT Act, you can get up to 6% interest is paid along with an add-on with the refund if they are delayed by IT department.

2. Also, a section 437 (1) makes it mandatory for an interest of 0.5% per month on the total refund amount.

3. However, there are certain conditions that apply on whether you will be eligible to receive these interest or not. For instance, the rule does not apply to those ITR which are filed incorrectly or has inaccurate information. Also, if you have made any mistakes in your ITR forms, then you will not be eligible.

4. The interest payout is calculated from the date of the refund is due.

What Is Income Tax Refund?

The Income Tax Department issues income tax refunds to eligible taxpayers whose tax payment amount exceeds the actual amount due either by the way of TD or TCS or Advance Tax or Self-Assessment Tax. The income tax refund is calculated by taking into consideration all the deductions and exemptions at the time of assessment by income tax department.

In general terms, the IT department refunds excess amount only after e-verification of the taxpayer. Then it takes about 4-5 weeks for the refund to be credited to the account of the taxpayer.

How To Check Income Tax Refund Status Online?

Step 1: Go to the e-Filing portal homepage.

Step 2: Enter the user ID and password.

It needs to be noted that for individual users, if PAN is not linked with the Aadhaar, you will see a pop-up message that your PAN is made inoperative as it is not linked with your Aadhaar.

Step 3: Go to e-File tab > Income Tax Returns > View Filed Returns.

Step 4: Now you can check the refund status for the desired Assessment year.

Click on View Details and here you can also check the life cycle of filed ITR. Key status of your ITR filing will be mentioned eventually.

Status 1: When refund is issued:

Status 2: When refund is partially adjusted:

Status 4: When refund is failed:

Noteworthily, if your PAN is inoperative, your refund will get failed and you will see a warning message to link your PAN with the Aadhaar.

CBDT Chairman Ravi Agrawal told PTI that the Income Tax Department is undertaking an analysis of wrongful deductions claimed in certain cases, leading to a delay in issuance of refunds, and legitimate payouts are expected by December.