Last reviewed: 25 September 2026. There are exactly five places a refund gets stuck: your return (unverified/unprocessed), your intimation (adjusted), your bank record (invalid), an old demand (set-off under 245), or the credit itself (failed and awaiting reissue). Each has a different fix, and chasing the wrong one wastes weeks. Decode the intimation first with the 143(1) guide, then use this map.
This guide deals with refunds for AY 2026-27 (income of FY 2025-26) and earlier years. Those returns and their processing stay under the Income-tax Act, 1961, so the 1961 section numbers (143(1), 154, 244A, 245) are the right ones to quote. The one exception is interest for the period from 1 April 2026, which section 536(2)(g) of the Income-tax Act, 2025 routes through section 437 of the new Act.
The five-stage diagnosis
| Stage stuck | How it looks | Fix |
|---|---|---|
| Return not verified | Filed but “pending e-verification” | Verify (Aadhaar OTP/EVC) — unverified returns simply never process |
| Processing pending | Verified, no intimation yet | Patience within service timelines; grievance only after reasonable lapse |
| Refund reduced/NIL in intimation | 143(1) adjusted TDS/claims | Rectification (154) or response with evidence — the decode tells which |
| Bank validation failed | “Refund failure” status | Validate the right account (PAN-linked, live, name-matching) and request reissue |
| 245 set-off | Refund adjusted against an old demand | If demand is wrong: respond/dispute on record, seek balance; if right: it was never your money |
The timeline the law sets
| Step | Time limit | What happens if missed |
|---|---|---|
| E-verify the return | 30 days from uploading | The return is treated as filed on the date of verification, which can make it belated; or it is invalid if never verified |
| Processing under 143(1) | Nine months from the end of the financial year in which the return was filed | For a return filed in FY 2026-27, the intimation cannot be sent after 31 December 2027 |
| Response to a 245 set-off intimation | Generally 30 days in the CPC communication | The adjustment usually goes ahead without your side on record |
| Rectification under 154 | Four years from the end of the financial year in which the order was passed | The mistake has to be pursued through other routes |
What the portal status means
| Status you see | What it usually means | Your move |
|---|---|---|
| Pending e-verification | Return uploaded, not yet verified | Verify now, within 30 days |
| Successfully e-verified | In the CPC processing queue | Wait; watch your email and SMS for the intimation |
| Processed with refund due | Intimation issued; refund sent to the refund banker | Track it on the refund status page |
| Refund failure | Credit bounced: account closed, not validated or name mismatch | Re-validate the account and raise a refund reissue request |
| Adjusted against outstanding demand | Section 245 set-off applied | Check the demand year and basis; dispute on the portal if wrong |
Worked example: interest on a delayed refund
Meera, a salaried taxpayer, files her AY 2026-27 return on 20 July 2026, before the due date. Tax determined on processing is ₹2,00,000 and TDS credited is ₹2,40,000, so the refund is ₹40,000. The refund reaches her bank on 10 October 2026.
- The refund is 20% of the tax determined, above the 10% floor, so interest is payable.
- Because she filed by the due date, interest runs from 1 April 2026 to the date the refund is granted: April to October counts as seven months, since part of a month counts as a full month.
- Interest = ₹40,000 × 0.5% × 7 = ₹1,400.
Had she filed a belated return on 15 September 2026, interest would run only from the filing date: September and October, two months, or ₹400. This working uses the 0.5%-a-month method of section 244A; for the period from 1 April 2026 the charging section is section 437 of the 2025 Act, so compare the interest line on your intimation with this working.
Bank-detail hygiene that prevents most failures
- Account pre-validated on the portal AND name matching PAN records
- Joint accounts and changed account numbers are the classic failure pair
- Keep ONE refund account and leave it alone across years
- NRIs: only an Indian account works, usually the NRO or NRE account; see our note on NRI refunds and foreign accounts
When to escalate
- Grievance (e-Nivaran) with dates and screenshots once normal timelines lapse
- Assessing-officer route for legacy-year refunds CPC cannot touch
- Interest under Section 244A (Section 437 of the 2025 Act for the period from 1 April 2026) rides eligible delays — claim it, politely, on the record
If you live abroad and your refund is stuck because of the bank account or TDS on your NRO income, our CA services for NRIs cover the fix from validation to repatriation.
Frequently asked questions
Portal says “refund issued” but the bank shows nothing. Who is lying?
Usually neither — failed credits bounce back to the department. Check refund-failure status, fix the bank validation, and request reissue; the money is parked, not lost.
My refund was adjusted against a demand I never knew existed. Options?
Pull the demand’s year and basis, respond disputing it where wrong (rectification/appeal history matters), and seek the balance. Section 245 adjustments against wrong demands are recoverable with persistence.
I received a Section 245 intimation proposing to adjust my refund. How long do I have?
Section 245 requires the department to intimate you in writing before setting a refund off against an old demand, and the CPC communication generally allows 30 days to respond. Log in, open the response to outstanding demand, and choose whether you agree, disagree (with the rectification, appeal or stay details), or agree in part. If you do not respond, the adjustment usually goes ahead.
How long is “normal” to wait after verification?
Processing times vary by season and return complexity — think weeks, not days, before escalating; but never let an unverified return masquerade as “waiting”. The legal outer limit for a 143(1) intimation is nine months from the end of the financial year in which the return was filed.
Does revising my return delay the refund?
The revised return replaces the original in the queue — a correctness-vs-speed trade that is usually worth it when real errors exist.
Can someone else’s account receive my refund?
No — name-match rules block third-party credits by design. The fix is validating your own account, not hunting workarounds.
I am an NRI. Can the refund go to my foreign bank account?
No. Income-tax refunds are credited only to a bank account in India. Pre-validate an Indian account in your own name, usually your NRO or NRE account, on the e-filing portal before the return is processed; a foreign account will not validate and the refund will fail.
Refund of an old year (two years ago) never came. Same process?
Older years may sit outside CPC’s cycle. If the return was filed and processed, AO-side follow-up with the acknowledgements is the route. If the claim was never made in time, the route is a condonation application under Section 119(2)(b) of the 1961 Act (now Section 239(3)(b) of the 2025 Act). Bring the acknowledgements and it is a paperwork campaign, not a mystery.
Will filing a grievance annoy the department?
A dated, factual grievance is a normal instrument — it creates the record that later escalation stands on. Rudeness annoys; documentation works.
Is interest on delayed refunds automatic?
Interest under Section 244A (Section 437 of the 2025 Act for the period from 1 April 2026) generally rides eligible refunds, at 0.5% a month or part of a month. No interest is due if the refund is less than 10% of the tax determined. Where the computation short-changes you, rectification asks for the difference — check the intimation’s interest line rather than assuming.
We diagnose the actual stage, fix the record — validation, rectification, 245 responses — and track the money to credit.
Refunds & RectificationIncome Tax FilingRequest a Scope DiscussionThis article is a general educational summary as on 25 September 2026 and is not professional advice or an assurance of any approval, registration or outcome — departmental decisions rest with the authorities on each case’s facts. Requirements change; verify current rules or discuss your specific case before acting.