| When and how you get your money back | |
|---|---|
| Payment mode at booking | Refund you are entitled to |
| Credit card | Cash refund to the same card account within 7 days of cancellation |
| Cash paid at airline office | Immediate cash refund at the airline office where the ticket was bought |
| Travel agent or online portal | Airline completes the refund within 14 working days; the airline stays responsible, not just the agent |
| Credit shell or voucher | Only if you say yes; it cannot be forced on you as the default |
When an airline cancels your flight, or you cancel within the rules, your money is supposed to come back to you in cash through the same channel you paid with, not as a credit shell you can only spend on that same airline. From 26 March 2026 the Directorate General of Civil Aviation (DGCA) made this a clear legal right through a revised Civil Aviation Requirement (CAR) issued on 24 February 2026. This guide explains exactly what you can claim, the new 48-hour free-change window, why your taxes come back even on a no-show, and how to force a refund if the airline stalls.
For years the standard airline practice was to push a cancelled-ticket refund into a “credit shell”: a wallet of points locked to that one airline, often expiring within a year, that you could never withdraw as cash. Passengers who simply wanted their money back were told a credit shell was “the policy”. The DGCA revised the CAR on refunds to end that. The new rules, notified on 24 February 2026 and effective from 26 March 2026, set minimum standards every scheduled airline operating in India must follow. They cover three things passengers fought over the most: the form of the refund, the speed of the refund, and the taxes inside the fare.
This is the core of the new CAR. A credit shell is store credit; cash is your money back. The rule now says holding a refund in a credit shell is the passenger's choice, not the airline's default practice. In plain terms:
So if an airline cancels your flight and offers you a credit shell, you can refuse and demand the cash. A credit shell is now a choice you can take if it suits you, never a trap you are pushed into.
The CAR also adds a free look-in window. For bookings made directly with the airline, you get 48 hours after booking to cancel or reschedule without any cancellation or change penalty. You pay only the genuine fare difference if the new flight costs more. The catch: the look-in applies when departure is at least 7 days away for domestic flights, or at least 15 days away for international flights, counted from the booking date. Book a same-week flight and the free window does not apply. Used well, it is a safety net for the wrong-date or wrong-airport booking everyone makes once.
This rule alone is worth real money. Even on the cheapest non-refundable promotional fare, and even if you simply do not show up, the airline must refund all statutory taxes and fees:
The logic is simple: these are airport and government charges collected only because you were supposed to fly. If you do not fly, the airline never pays them onward, so it cannot keep them. The CAR makes this explicit for cancellation, non-utilisation, and no-show, regardless of fare type. If you missed a flight on a “non-refundable” ticket and assumed you get nothing, you are still owed these taxes.
Take a passenger, Anita, who booked a Delhi to Pune ticket for ₹6,200 on her credit card. The fare breaks down as ₹4,500 base fare plus ₹1,700 in UDF, PSF and other statutory charges. The airline cancels the flight a day before departure.
Now flip it: Anita herself misses the same flight (a no-show) on a non-refundable fare. She loses the ₹4,500 base fare, but the airline must still return the ₹1,700 in statutory taxes and fees. Many passengers never claim this and quietly lose it.
The escalation ladder has not changed; the new CAR just gives you a stronger rule to cite at each rung.
A crisp, fact-led complaint works best. You can draft one fast with the AI complaint and RTI draft tool. If a public airport authority is involved in the fee dispute, an RTI under the Right to Information Act can pull the charge breakup.
No. Since the 26 March 2026 CAR, a credit shell needs your consent. If you do not agree, the default is a cash or original-mode refund to the way you paid.
Within 7 days of cancellation, back to the same credit card account, under the DGCA CAR issued on 24 February 2026.
Yes. The airline must still refund all statutory taxes and fees (UDF, ADF, PSF) on a no-show, even when the base fare is non-refundable.
A free change-or-cancel window for 48 hours after booking, available when departure is at least 7 days away for domestic flights or 15 days for international, charging only the fare difference.
The airline remains responsible and must complete the refund within 14 working days for agent or portal bookings. Pursue the airline, not only the agent.
Start on AirSewa, escalate to the DGCA, and for your money plus compensation file before the District Consumer Commission.
For a wider citizen-rights toolkit, see The RTI Playbook.