Income Tax Refund: The Income Tax Department had previously announced that most refunds would be processed by the end of December 2025. As a result, refunds have already been credited to the accounts of a large number of taxpayers. However, some refunds are still pending, which the department is preparing to process soon.
Why does the refund get stuck?
According to experts, if any mismatch or discrepancy is found in the ITR, the Income Tax Department sends a notice to the taxpayer, asking for a response and clarification. Once the taxpayer responds to the notice correctly, the refund is issued.
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However, in cases where there are no errors, refund delays are usually due to processing timelines. Such refunds are automatically cleared in the next batch.
6 major reasons for delay in income tax refund
ITR Mismatch: If there is a discrepancy between the income shown in the ITR and the figures in Form 26AS or AIS, the Income Tax Department may withhold the refund until the taxpayer rectifies the discrepancy.
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Unverified bank account: If the bank account details are incorrect or the account is not verified on the e-filing portal, the refund is not credited and the process gets stuck.
Wrong deductions: Claiming deductions or exemptions for which the taxpayer is not eligible may result in withholding of refund and additional scrutiny by the department.
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Non-e-verification: If e-verification is not done on time after filing the return, the ITR is considered incomplete, due to which refund is not issued.
High-value transactions: If large transactions are flagged under risk assessment, the Income Tax Department may conduct additional scrutiny before issuing the refund.
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Delay in backend processing: In many cases, despite there being no discrepancy, the refund gets shifted to the next batch due to the Income Tax Department’s system or processing delay.
What should taxpayers do?
If your income tax refund hasn’t arrived yet, first check your ITR details, Form 26AS/AIS, bank account verification, and e-verification status. Also, if you receive any notices from the Income Tax Department, it’s important to respond promptly to avoid further delays in your refund.