ITR Refund Delays: India is witnessing an unusual wave of frustration among taxpayers as Income Tax Return (ITR) refunds for FY 2024–25 (AY 2025–26) remain stuck for months. Even after successful e-verification, thousands report their returns still “under processing,” with many stating they have received no movement despite raising grievances on the portal.
This year’s slowdown is not random; it stems from a combination of tighter data checks, late release of ITR utilities, mismatch-prone filings and mounting pressure on the Centralised Processing Centre (CPC). Here is a detailed, verified explanation of what is causing the delay — and what taxpayers can do immediately.
Key Takeaways: Why ITR Refunds Are Delayed in AY 2025–26 (Essential Insights for Taxpayers)
- High scrutiny of mismatch-prone categories like salary, NRI and property capital gains returns
- Delayed release of ITR forms compressed the filing window, causing bunching at CPC
- Data inconsistencies across AIS, TIS, Form 26AS and Form 16 push returns into slower verification
- Five common taxpayer errors — unverified ITR, bank issues, TDS mismatch, defective returns and doubtful claims — remain major causes of refund hold
- Taxpayers on social platform X are demanding faster action as returns stay unprocessed for 3–4 months
- Refunds issued late may include interest under Section 244A, giving some taxpayers higher payouts
- Refunds may be held under Section 245(2) due to pending past tax demands
- The Income Tax Department assures that pending refunds are being cleared, with priority given to validated returns
A Growing Backlog: Taxpayers Flood X with Complaints
This year, dissatisfaction over refund delays has reached social media at scale. Taxpayers across India have posted screenshots on X (formerly Twitter), showing returns stuck “under processing” for months. Many users say:
- Every family member received their refund except one
- Even after filing grievances, no progress is visible
- Standard, copy-paste replies from the department offer no clear timeline
- Refund status often shows “Refund Not Issued,” despite successful return processing
This public outcry reflects widespread anxiety, particularly for individuals relying on refunds for planned expenses or bill payments.
Why Refund Processing Is Slower This Year: Expert View from Tax Professionals
Tax experts cite multiple friction points that converged this year:
1. Late Release of ITR Forms and Utilities
Forms were released later than usual due to regulatory updates involving capital gains reporting, foreign asset disclosures and TDS/TCS reconciliation. This shortened the filing window and pushed a heavy volume of last-minute returns into CPC.
2. Stricter Data-Matching Protocols
The Income Tax Department increasingly relies on automated data checks. Returns are slowed when discrepancies appear between:
- AIS
- TIS
- Form 26AS
- Form 16
- Property transaction records
Even small mismatches — duplicated entries, incorrect credits, missing TDS deposits — trigger further verification.
3. High-Risk Categories Facing Deep Scrutiny
Experts highlighted three categories receiving the most checks:
| Category | Why It Faces Delays |
| Salary Returns | Multiple employers, mismatched Form 16s, incorrect TDS credits |
| NRI Returns | DTAA positions, foreign tax credit compliance, documentation gaps |
| Property Capital Gains | Cross-checks with stamp duty, sale value, property TDS, AIS entries |
4. Unusual or High Refund Claims
High-value refunds undergo deeper review to prevent incorrect payouts. Taxpayers may be asked for revised returns or additional documents.
Legal Timelines: What the Law Allows the Department to Do
Processing window under Section 143(1)
The department has time until 31 December 2026 to process returns for FY 2024–25.
This means slow processing, while inconvenient, is legally permitted.
Refund held under Section 245(2)
If past tax demands exist, refunds may be held until old dues are verified.
Interest compensation under Section 244A
Delayed refunds attract 6% annual interest, which is why taxpayers who received refunds in December reported unexpectedly higher amounts.
Five Common Mistakes That Delay Refunds (Check These Immediately)
Despite system-level delays, a large number of refund issues arise from avoidable taxpayer errors:
1. ITR Not Verified Within 30 Days
An unverified return is treated as invalid.
Late verification makes the return belated, delaying refunds.
2. Bank Account Not Updated or Pre-Validated
Refunds are sent only to PAN-linked, validated accounts.
IFSC changes after bank mergers or closed accounts cause refund failures.
3. Ignoring Notices for Defective Returns (Section 139(9))
Failure to correct errors quickly pushes processing back significantly.
4. Doubtful Claims Flagged by the System
Mismatch in exemption proofs or early employer cutoffs may trigger scrutiny.
5. Mismatch in TDS Deposits
If deductors fail to deposit TDS or file returns correctly, AIS will not reflect the credit.
Taxpayers must contact the deductor for correction and file rectification if needed.
How to Check ITR Refund Status: Official Method
Follow these steps on the income tax portal:
- Visit eportal.incometax.gov.in
- Log in with your user ID and password
- Open e-File → Income Tax Returns → View Filed Returns
- Select the relevant assessment year
- Click View Details to check refund and processing status
Taxpayers should also check email regularly for discrepancy intimations.
Department’s Reassurance: Refunds Being Cleared in Phases
Despite rising complaints, the Income Tax Department says refund processing is underway and has advised taxpayers to:
- Verify bank account pre-validation
- Reconcile AIS, TIS, Form 16 and Form 26AS
- Respond quickly to any notices
- Avoid repeated grievance submissions unless new details emerge
Officials indicate that most pending refunds will be cleared as system checks complete.
A Clear Road Ahead for Taxpayers
While this year’s processing delays are frustrating, they reflect a broader shift toward data-driven verification. For many taxpayers, refunds will eventually arrive with added interest. But the most effective steps right now are simple: ensure your bank account is validated, check for AIS or TDS mismatches, verify your return on time, and respond to any portal notices promptly.
Staying proactive can significantly reduce waiting time — and help your ITR move out of the pending queue faster.
FAQs on ITR Refund Delay 2025
1. Why is my ITR refund delayed for AY 2025–26?
Refunds are delayed due to data mismatches, late ITR form release, stricter verification, high refund scrutiny, bank issues, and taxpayer filing errors.
2. How long does the Income Tax Department take to process refunds?
Refunds generally take 4–5 weeks after e-verification. Delays occur if discrepancies, mismatches, or verification issues are detected in your return.
3. How can I check my ITR refund status online?
Login to eportal.incometax.gov.in, open e-File, select Income Tax Returns, choose View Filed Returns, and check refund status under View Details.
4. What common mistakes delay ITR refunds?
Unverified ITR, invalid bank account, defective return notices, TDS mismatches, and doubtful claims frequently cause refund delays.
5. Do delayed ITR refunds earn interest?
Yes. Under Section 244A, delayed refunds earn around 6% annual interest, increasing the final refund amount.
