Tax Refund Delayed? You Can Claim 8% Interest

If the Income Tax Department holds your refund longer than it should, you are legally entitled to interest on that money. Courts have upheld this right repeatedly. Here is what you can do to claim it.

Here's what happened: Karnataka High Court ordered tax authorities to refund a withheld auction deposit of ₹2.89 crore along with 8% annual interest, payable within eight weeks.. The refund involved income tax and VAT deducted on an iron ore auction that did not go through — the depositor had to fight in court to recover money that was never legitimately due.. Indian courts have consistently held that government bodies cannot sit on refund amounts indefinitely; interest at 6–8% is routinely awarded to compensate citizens for the delay..

What you should do: Log in to incometax.gov.in and check your 'Refund Status' tab — any refund pending over 90 days may already attract interest under Section 244A.. File a written grievance on the income tax e-filing portal under 'Grievances > Submit Grievance' if your refund is overdue — this creates an official timestamp for interest calculation.. If the department ignores your grievance for 60+ days, consult a chartered accountant about filing a rectification request under Section 154 or approaching your jurisdictional High Court for a writ of mandamus..

Section 244A interest on your delayed IT refund is taxable — but it still beats a savings account rate. Always report it under 'Income from Other Sources' in your next ITR to stay compliant.