New Delhi: In a major move to enhance passenger rights and transparency, India’s aviation regulator, the Directorate General of Civil Aviation (DGCA), has introduced new refund rules effective March 26, 2026, ensuring faster processing and eliminating additional charges on ticket cancellations.
The revised guidelines come in response to a surge in passenger complaints related to delayed refunds, unfair deductions, and the forced use of credit shells by airlines. The DGCA noted that refund-related grievances had become a significant concern, prompting regulatory intervention to establish minimum service standards across the aviation industry.
No Extra Fees & Defined Refund Timelines
Under the new framework, airlines are prohibited from charging any additional fee for processing refunds. Clear timelines have also been mandated:
- Refunds must be processed within 7 days for credit card payments
- Immediate refunds for tickets booked using cash at airline offices
- Refunds for bookings made via travel agents or online portals must be completed within 14 working days
Importantly, the DGCA has clarified that airlines remain responsible for processing refunds even if tickets are booked through intermediaries.
No Forced Credit Shells & Full Refund Transparency
The new rules strictly prohibit airlines from forcing passengers to accept refunds in the form of credit shells. Instead, this can only be offered as an optional choice.
Airlines are also required to provide full transparency by clearly displaying refund amounts along with a detailed cost breakdown, including taxes and charges such as UDF, ADF, and PSF—even for non-refundable tickets in cases of cancellations or no-shows.
Additionally, airlines must publish clear refund policies on their official websites.
48-Hour Free Cancellation Window
Passengers will now benefit from a 48-hour risk-free cancellation window, allowing them to cancel or amend bookings without extra charges (except fare differences).
However, this benefit is not applicable if the scheduled departure is within:
- 7 days (domestic travel)
- 15 days (international travel)
Beyond this period, standard airline cancellation charges will apply.
Cap on Cancellation Charges
To prevent excessive penalties, the DGCA has capped cancellation charges, ensuring airlines cannot levy fees higher than the basic fare plus fuel surcharge. Airlines are also required to clearly display these charges at the time of booking.
Special Provisions & Passenger-Friendly Measures
The new rules include additional passenger-friendly provisions:
- Refunds or credit shells allowed in case of medical emergencies involving passengers or family members on the same PNR
- Name correction charges waived for spelling errors reported within 24 hours of booking
- Refund disputes and delays to be minimized through stricter compliance
Applicability Across Domestic & International Travel
These rules apply to both domestic and international tickets booked with airlines operating to and from India. Foreign airlines, however, will follow refund norms based on their country of origin regulations.
Seat Fee Transparency
In a parallel move, the government has also directed airlines to ensure that up to 60% of seats on domestic flights remain free of seat selection charges, improving accessibility and fairness. Currently, airlines charge between ₹200 and ₹2,100 for seat selection.
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