Refund Failed? How to Raise a Refund Reissue Request on the Income Tax e-Filing Portal

When the Income Tax Department processes your return under Section 143(1) of the Income Tax Act 1961 and the intimation shows a refund "determined", the money does not always land in your bank account. For assessment year 2026-27 (financial year 2025-26), refunds are routed by the refund banker (State Bank of India) to the single bank account you have pre-validated on the e-filing portal. If that account has been closed, frozen, de-linked from your PAN, or fails the account-name match, the credit bounces and the status changes to "Refund Failure". Nothing is lost; the amount stays with the department until you tell it where to send the money again.

The instrument for that correction is the Refund Reissue service on incometax.gov.in. Per the department's user manual, a registered user whose issued refund has failed can raise a fresh request, nominate a validated bank account, and re-verify. On success the portal displays a Transaction ID and sends confirmation by both email and SMS. This article walks a salaried reader through the statute behind the refund, a fully worked numerical example under the FY 2025-26 new-regime slabs, and the exact 6-click path to raise the request.

The Scenario

Consider Meera, a salaried professional filing for FY 2025-26. Her employer deducted TDS of Rs 28,000 against her salary, and her bank deducted a further Rs 12,000 as 10% TDS on fixed-deposit interest of Rs 1,20,000 — a combined Rs 40,000 sitting in Form 26AS and the Annual Information Statement. When her return is processed, her computed liability works out to nil, so the entire Rs 40,000 is refundable. Her ITR is filed and e-verified within the 30-day window, and the intimation under Section 143(1) confirms the refund.

Three weeks later the tax refund has still not arrived. Logging into the portal, Meera sees the status "Refund Failure — account closed". The savings account she had validated in April 2025 was shut when she switched banks in June 2025, so the refund banker could not credit it. This is one of the five most common failure reasons the department lists, alongside "account not pre-validated", "PAN not linked to the account", "name mismatch", and "invalid IFSC after a bank merger". Every one of these is fixable by the reader without a physical visit to any office.

Statutory Answer

The right to the money itself flows from Section 237 of the Income Tax Act 1961, which entitles an assessee to a refund where the tax paid — whether by TDS, advance tax, or self-assessment tax — exceeds the amount properly chargeable for that assessment year. A refund failure does not extinguish this right; it only delays disbursement, and Section 237 continues to hold the claim open until the department pays.

Crucially, a delayed refund is not an interest-free loan to the government. Section 244A of the Income Tax Act 1961 provides for simple interest on refunds. Where the refund arises from TDS or advance tax, interest runs at one-half per cent for every month or part of a month, computed from 1 April of the assessment year until the date the refund is granted, provided the refund is at least 10% of the tax determined. A reissue triggered by a bounced credit does not restart or forfeit this Section 244A interest; the clock keeps running on the department's side while your corrected bank details are processed.

The reissue mechanism itself operates through the e-filing portal's refund-reissue facility, which the Income Tax Department documents in its official user manual at incometax.gov.in. To use it you need three prerequisites in place: a filed ITR carrying a refund that has failed, at least one validated bank account on the portal (validation is done under Services > My Bank Account), and a working verification method — an Aadhaar-linked mobile for Electronic Verification Code (EVC), a pre-validated bank or demat account, Net Banking, or a Digital Signature Certificate (DSC). Miss any one of these and the "Create Refund Reissue Request" button will not complete.

Worked Resolution

Take Meera's numbers through the FY 2025-26 new-regime computation to confirm the Rs 40,000 refund is genuine before she re-requests it. Her gross salary is Rs 11,00,000 and her FD interest is Rs 1,20,000, giving gross total income of Rs 12,20,000. The new-regime standard deduction of Rs 75,000 applies against salary, bringing net taxable income to Rs 11,45,000. You can reproduce this on Oquilia's income tax calculator and compare regimes on the old vs new regime tool.

Applying the FY 2025-26 new-regime slabs — nil up to Rs 4,00,000, 5% on Rs 4,00,000 to Rs 8,00,000, and 10% on Rs 8,00,000 to Rs 12,00,000 — the tax on Rs 11,45,000 is Rs 20,000 plus Rs 34,500, i.e. Rs 54,500 before rebate. Because her net taxable income of Rs 11,45,000 is at or below Rs 12,00,000, the Section 87A rebate of up to Rs 60,000 in the new regime wipes out the entire Rs 54,500, leaving nil tax and nil 4% health-and-education cess. Her total liability is therefore Rs 0, and the full Rs 40,000 of TDS becomes refundable.

With the amount confirmed, Meera raises the reissue. Per the department's user manual the path is: Login > Services > Refund Reissue > Create Refund Reissue Request > select the failed record > select the bank account to receive the refund > Proceed to Verification > e-Verify. If the account she wants to use is not yet validated, she first adds and validates it under Services > My Bank Account, waits for the "Validated" and "EVC-enabled" status, then returns to the reissue screen. On completing e-verification the portal shows a Transaction ID and emails and texts the confirmation.

Because Meera's refund of Rs 40,000 exceeds 10% of her determined tax, Section 244A interest continues to accrue at 0.5% per month from 1 April 2026 until the reissued amount is credited, so the reissue delay does not cost her the statutory interest. Once the corrected account clears, the Rs 40,000 plus interest lands directly, and the status flips from "Refund Failure" to "Refund Issued". Readers wanting to sanity-check the TDS side of any refund can use Oquilia's TDS calculator.

FAQ

How long does a refund reissue take to be credited?

The Income Tax Department does not publish a fixed service-level timeline, but once the reissue request is e-verified and the bank account is validated, the refund banker typically re-attempts the credit in the next processing cycle. Track the live position under Services > Know Your Refund Status on incometax.gov.in using your PAN and assessment year 2026-27; the status will move from "Refund Failure" to "Refund Reissued" to "Refund Issued".

Do I lose the Section 244A interest because my first refund failed?

No. Under Section 244A of the Income Tax Act 1961, simple interest at 0.5% per month accrues from 1 April of the assessment year on refunds arising from TDS or advance tax, provided the refund is at least 10% of the determined tax. A bounced credit followed by a reissue does not reset or forfeit that interest; it continues to run until the corrected credit is made.

Why did my refund fail even though my account was correct earlier?

The five common triggers are: the account was closed or dormant, it was never pre-validated on the portal, the PAN is not linked to that account, the account holder's name does not match PAN records, or the IFSC changed after a bank merger. The refund banker cannot credit a failed account, so you must add and validate a working account under Services > My Bank Account before creating the reissue request.

Can I use a different bank account for the reissue than the one on my ITR?

Yes. On the Refund Reissue screen you select which validated bank account should receive the refund, and it can differ from the account quoted in the original ITR. The only conditions are that the new account is pre-validated and EVC-enabled on the portal for assessment year 2026-27; the department credits the amount to whichever validated account you nominate.

What verification methods can I use to submit the reissue request?

Per the department's user manual you can e-verify a refund reissue request using an Electronic Verification Code (EVC) sent to your Aadhaar-linked mobile, a pre-validated bank account, a pre-validated demat account, Net Banking login, or a Digital Signature Certificate (DSC). At least one of these must be active for the "Proceed to Verification" step to complete.

Does raising a reissue require re-filing or revising my ITR?

No. A refund reissue is a disbursement correction, not a return correction. Your original return filed and e-verified for FY 2025-26 under Section 143(1) stands unchanged; you are only telling the department where to send money it has already determined is yours. Revising the ITR is only needed if the refund figure itself was wrong.

What happens if I ignore a failed refund and never reissue?

The claim survives under Section 237 of the Income Tax Act 1961 and the money is not written off, but it will sit undisbursed indefinitely until you raise a reissue request. There is no automatic re-credit; the portal waits for you to nominate a validated account, so an ignored "Refund Failure" simply means you never receive cash that is legally yours.