Why Your Income Tax Refund Interest Went Missing? Know Before Filing For AY 2025-26

Chaitra Seetharam | Last updated: 02 October 2025

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This article explains why you might not be receiving interest on your income tax refund for AY 2025-26. Interest is typically paid under Section 244A of the Income Tax Act at 0.5% per month if the refund is delayed, but it's not granted if the refund is less than 10% of the assessed tax or below ₹100. While the refund principal is not taxable, the interest earned is considered taxable income and must be declared under 'Income from Other Sources'.

Under section 244A of the Income Tax Act, interest on tax refunds is payable at 0.5% per month from either April 1 of the assessment year (if returns are filed on time) or the date of filing/payment (for late filings or self-assessment tax), until the refund is processed, unless the refund amount i

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About the Author

Chaitra Seetharam

Finance Professional

I write on Income Tax, TDS, ITR filing, banking rules, investment schemes, and financial law updates in India. My articles simplify complex tax provisions, compliance requirements, and policy changes to help taxpayers, professionals, senior citizens, and businesses stay informed and financially aware.

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Why Your Income Tax Refund Interest Went Missing? Know Before Filing For AY 2025-26

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