Refund failed? How to raise a refund reissue request on the income tax e-filing portal

You filed your return on time, the intimation under Section 143(1) confirmed a refund was due, and then nothing arrived in your bank account. Instead, the e-Filing portal shows the refund status as "failed". This is one of the most common post-filing hiccups of Assessment Year 2026-27, and it is almost always fixable in under ten minutes without writing a single grievance letter. The remedy is a Refund Reissue Request, and the Income Tax Department's own user manual sets out the exact path. This Q&A walks through why refunds fail, the statutory footing under the Income-tax Act 1961, and a worked example on a Rs 15,00,000 salary so you can see the interest arithmetic for yourself.

The Scenario

Picture Ananya, a salaried professional whose Form 26AS for FY 2025-26 shows Rs 1,20,000 of tax credit against a self-computed liability of about Rs 97,500. Her return, filed and e-verified within the 30-day window, was processed on 1 April 2026 with a determined refund of Rs 22,500. Three weeks later the refund status flipped to "failed" because the savings account she had quoted was closed in January 2026.

A failed refund is not a rejected refund. The Rs 22,500 is still legally hers; the money simply could not settle into a dead account and was returned to the Centralised Processing Centre (CPC) in Bengaluru. The Income Tax Department flags four recurring causes for a failed credit, and all four are administrative rather than substantive:

The critical point for Ananya, and for roughly the same profile of taxpayers every refund cycle, is that the ITR itself needs no amendment. She does not re-file, she does not revise, and she does not lose the refund. She raises a reissue request against the already-determined amount of Rs 22,500 and points it at a working bank account.

Statutory Answer

The right to a refund flows from Section 237 of the Income-tax Act 1961, which entitles any person who has paid tax in excess of the amount properly chargeable to a refund of that excess. Once the CPC determines a refund under Section 143(1), that determination stands even if the first payment attempt fails; the reissue mechanism is purely about delivery, not entitlement.

Interest on the delayed money is governed by Section 244A of the Income-tax Act 1961, which fixes simple interest at 0.5 per cent for every month or part of a month, equal to 6 per cent per annum, as verified against the statute on indiacode.nic.in. For a refund arising out of TDS or advance tax, that interest ordinarily runs from 1 April of the assessment year, so for AY 2026-27 the clock starts on 1 April 2026 and continues up to the date the refund is actually granted.

There is a taxpayer-side catch worth stating plainly. Section 244A(2) allows the Assessing Officer to exclude any period of delay that is attributable to the assessee. If your refund failed because you quoted a closed account or never pre-validated the correct one, the days lost to that error can, in principle, be carved out of the interest computation, though in routine reissues where you act quickly the excluded period is usually negligible. This is precisely why validating the destination account before the first payment run protects both your money and your interest.

The delivery rule is set out in the refund reissue user manual: only a pre-validated, PAN-linked bank account can receive a refund, and only validated accounts are even displayed in the reissue selection screen. Since the March 2019 shift to fully electronic refunds, the Department no longer issues paper cheques, so a live bank account validated on the portal is not optional, it is the single channel through which the Rs 22,500 can reach you.

Worked Resolution

Start by confirming the amount actually at stake, because the reissue request is raised against that exact figure. Ananya's numbers for FY 2025-26 under the new regime, using the slabs in Oquilia's income tax calculator, work out as follows.

Note that the Section 87A rebate of up to Rs 60,000, which fully wipes out tax where income does not exceed Rs 12,00,000 in the new regime for FY 2025-26, does not apply here because Ananya's taxable income of Rs 14,25,000 is above that ceiling. Her refund is driven entirely by TDS of Rs 1,20,000 exceeding the settled liability of Rs 97,500, which you can sanity-check against your own deductions using the TDS calculator.

With the Rs 22,500 confirmed, the reissue itself is an eight-step flow on the portal, and the official manual lists each screen:

1. Log in to the e-Filing portal with your PAN and password (as of the 2026 portal build).
2. Go to Services > Refund Reissue and select Create Refund Reissue Request.
3. Select the failed refund record you want to reissue from the list shown.
4. Choose a pre-validated bank account; only validated accounts appear, so add and validate one first under Profile > My Bank Account if none is listed.
5. Click Proceed to Verification.
6. Select your e-verification method: Aadhaar OTP to the registered mobile, EVC through a bank or demat account or net banking, or a registered DSC.
7. Complete the verification.
8. Note the Transaction ID shown on the success screen; the same confirmation is sent to your registered email and mobile.

On the interest, Section 244A keeps working in Ananya's favour while the reissue is pending. At 0.5 per cent per month on Rs 22,500, the accrual is Rs 112.50 for each month or part-month of delay from 1 April 2026, subject to the Section 244A(2) exclusion for any delay she caused. The table below shows how that builds, assuming she raises the reissue promptly so no period is excluded.

The practical takeaway is that a failed refund costs you nothing in principal and, if you act within the same assessment cycle, very little in lost interest; the entire fix is validating a live bank account and e-verifying the reissue.

FAQ

How long does a refund reissue take to credit?

Once the reissue request is verified and a Transaction ID is generated, the CPC re-runs the payment against your validated account, and credits typically settle within a few weeks. Track the status under Services > Refund Reissue or through the "Know Your Refund Status" service on the e-Filing portal.

Do I need to file a revised return to fix a failed refund?

No. A failed refund under Section 143(1) leaves the determined amount of, in Ananya's case, Rs 22,500 fully intact. You raise a reissue against the existing determination; you do not revise or re-file the ITR. Revising a return is only relevant when the income or deductions reported were themselves wrong.

My bank account is not showing in the reissue screen. What now?

Only pre-validated accounts are displayed, per the official user manual. Go to Profile > My Bank Account, add the account, and complete pre-validation, which requires the account to be PAN-linked and the name to match your PAN record. Once validation succeeds, the account appears in the Refund Reissue selection step and can receive the TDS-driven refund.

Will I still get interest under Section 244A on a reissued refund?

Yes, in principle. Section 244A interest at 0.5 per cent per month runs up to the date the refund is actually granted, so a delay from a failed first attempt does not automatically forfeit it. The exception is Section 244A(2): any delay clearly attributable to you, such as quoting a closed account, may be excluded by the Assessing Officer from the interest period.

What if my refund failed because of a name-PAN mismatch?

Correct the mismatch at source before reissuing. If your bank KYC name differs from your PAN name, update one to match the other; the pre-validation step for Assessment Year 2026-27 will not succeed until the two agree. Only then will the reissue payment clear.

Can I change the refund bank account during reissue?

Yes. The reissue flow lets you nominate any pre-validated, PAN-linked account, which is precisely how you route the money away from a closed or dormant account to a live one. Add and validate the new account first, then select it at step four of the reissue request.

I never e-verified my original return. Does that affect the refund?

Critically, yes. If a return is not e-verified within 30 days it is treated as invalid and no refund is processed at all, as explained in our guide on why an unverified ITR is treated as invalid after 30 days. In that situation you would need to address the verification lapse first; a reissue only helps where a valid, processed return produced a refund that failed at the payment stage.