A large number of taxpayers have reported delays in receiving their income tax refunds for Assessment Year 2025โ26 after receiving SMS and email alerts from the Income Tax Department stating that their returns have been put on hold.
The Department said refunds were paused under a risk management process due to discrepancies in claims, including mismatches in deductions, exemptions, and third-party data. The alerts, issued as part of the Departmentโs NUDGE campaign, have triggered concern on social media, particularly as the deadline to file revised returns approaches on December 31, 2025. While authorities say the exercise is routine and refunds are being released, taxpayers have raised concerns over timing, communication gaps, and financial stress.
Key Takeaways on Income Tax Refund Delays
- Income tax refunds for AY 2025โ26 are on hold in several cases due to discrepancies flagged by the Income Tax Department
- Taxpayers have been asked to file revised returns by December 31, 2025
- Alerts are part of the Departmentโs NUDGE campaign using data analytics
- Issues include ineligible deductions, mismatches with Form 16, TDSโAIS gaps, and non-disclosure of foreign income
- High-value refunds above โน50,000 are under increased scrutiny
Why Income Tax Refunds Are Being Held
The Income Tax Department has reportedly paused refunds for several taxpayers after identifying discrepancies in their income tax returns. According to the Department, these cases were flagged under a risk management framework that examines mismatches between claims made in returns and data received from reporting entities.
Taxpayers have received SMS and email alerts stating that the processing of their returns has been put on hold due to discrepancies in refund claims. These communications relate to Assessment Year 2025โ26 and were sent as part of the Departmentโs โNUDGEโ campaign, which stands for Non-Intrusive Usage of Data to Guide and Enable.
The Department has described these messages as routine communications intended to ensure accuracy in tax filings. However, many taxpayers have expressed frustration over the alerts, citing vague messaging and limited time to respond.
Taxpayers Voice Concerns on Social Media
Several taxpayers have taken to the social media platform X to express concern and confusion over the messages. In one instance, a taxpayer shared a screenshot of the SMS, stating that the lack of clarity created unnecessary stress.
Another user, who identified as a Chartered Accountant, said that even taxpayers claiming genuine deductions were receiving emails stating that their returns had been temporarily put on hold. Some taxpayers questioned whether claiming deductions in their return, even if not reported to the employer, amounted to wrongdoing.
Others said they received the SMS without any follow-up email explaining the specific discrepancy, leaving them unsure how to respond. Many taxpayers reported difficulty reaching helpline numbers to register grievances.
Mismatch Issues Flagged by the Department
The Income Tax Department has cited several reasons for the increased alerts this year. These include:
- Ineligible claims of deductions and exemptions
- Mismatch between income disclosed in returns and data in the Annual Information Statement (AIS)
- Significant gap between Form 16 details and return filings
- Large or ineligible refund claims
- Non-disclosure of foreign assets or income
In some cases, taxpayers who opted for the new tax regimeโwhere deductions and exemptions are largely unavailable except for standard deductionโalso received messages. Sources said alerts were sent in such cases due to other discrepancies, such as incorrect selection of ITR forms.
One example cited was of a taxpayer whose tax was deducted under professional services, but who filed ITR-1 meant for salaried income, resulting in an email urging revision.
High-Value Refunds Under Scrutiny
High-value refunds, particularly those exceeding โน50,000, have been under closer examination. Taxpayers said they have been waiting for refunds since the September 16 filing deadline, with many flagging liquidity issues affecting household expenses.
Typically, as per the Income Tax Departmentโs own portal, refunds are credited within four to five weeks after filing and e-verification. Based on this timeline, most refunds should have been issued by October-end.
While many taxpayers have already received refunds, others remain puzzled by the delays.
CBDT Explains the Delay
Addressing the issue, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal said in November that the Department was analysing cases involving wrongful deduction claims, which was contributing to delayed refunds.
In a release dated December 13, the CBDT said it had acted against intermediaries involved in filing returns with bogus deductions and exemptions. The exercise revealed that some intermediaries operated networks across India, filing incorrect claims on a commission basis.
Sources said data analytics flagged over two lakh taxpayers who claimed suspicious deductions worth nearly โน5,500 crore under Section 80GGC, routed through suspicious or non-existent registered unrecognised political parties and charitable organisations.
Foreign Income Disclosure and Penalties
Several taxpayers also received emails regarding non-disclosure of foreign income or assets. One such email cited data shared by US authorities showing that a taxpayer held or earned foreign assets or income during calendar year 2024, which was not disclosed in the return.
The Department warned that non-disclosure of foreign income could attract penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax, 2015.
Revised and Updated Return Deadlines Explained
Taxpayers have been asked to file revised returns by December 31, 2025, which is three months before the end of the assessment year. A revised return can be filed to correct errors such as missing income, wrong TDS claims, or incorrect deductions.
Those who miss the deadline may file an updated return (ITR-U) from January 1, 2026. However, this comes with additional tax liability. As per rules amended under the Finance Act, 2025:
- ITR-U can be filed within 48 months from the end of the assessment year
- Filing within 24โ36 months attracts 60% additional tax on aggregate tax and interest
- Filing within 36โ48 months attracts 70% additional tax
Department Assures Refund Release
The Income Tax Department said the NUDGE campaign follows a โtrust-first approachโ and uses advanced data analytics. Taxpayers with genuine and correctly made claims are not required to take any action.
Sources said refunds have started being issued and are expected to reflect in the coming 10 days. So far, over 15 lakh returns have already been revised for AY 2025โ26. For comparison, 25.8 lakh revised returns were filed in AY 2024โ25.
Additionally, over 21 lakh taxpayers have updated returns for AYs 2021โ22 to 2024โ25 during the ongoing financial year, paying more than โน2,500 crore in taxes.
What This Means for Taxpayers
As the December 31 deadline approaches, taxpayers are urging the government to extend the timeline for filing revised returns. Many tax experts have advised taxpayers not to panic if they have received only an SMS and no email detailing discrepancies.
Experts said revised returns are required only when there is incorrect income disclosure or wrongful deductions. Taxpayers awaiting refunds have been advised to monitor official communication channels and review their returns carefully where required.
Spiritual Perspective on Duty and Liberation
In countries like India, taxation is a fundamental civic obligation, where individuals contribute a share of their earnings to sustain governance and public systems.
From a spiritual perspective, similar reasoning is often applied to human life itself. Spiritual traditions explain that just as people utilize natural resources such as land, water, air, and energy, there is also an unseen accountability tied to existence. This perspective holds that freedom from worldly obligations comes through a defined spiritual path. According to spiritual teachings explained by Tatvdarshi Sant Rampal Ji Maharaj, true devotion under the guidance of a complete Spiritual Guru is described as the means to settle this existential accountability. This idea is referenced in the Bhagavad Gita, Chapter 18, Verse 66.ย
For more information visit our
Website: www.jagatgururampalji.org
YouTube: Sant Rampal Ji Maharaj
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FAQs on Income Tax Refund Delays
1. Why are income tax refunds delayed for AY 2025โ26?
Refunds are delayed due to discrepancies flagged under the Income Tax Departmentโs risk management framework.
2. What is the deadline to file a revised return?
The deadline to file a revised return is December 31, 2025.
3. What is the NUDGE campaign?
NUDGE is a data-driven initiative to help taxpayers voluntarily correct ineligible claims.
4. Are refunds above โน50,000 under scrutiny?
Yes, high-value refunds above โน50,000 are being closely examined.
5. Can taxpayers still file returns after December 31?
Yes, an updated return can be filed from January 1, 2026, with additional tax liability.
