Income Tax Refund Delay: Over the past few months, a large number of taxpayers have been frustrated by the delay in their income tax refunds. Many have complained on social media that their refunds have not been issued even weeks or months after filing their returns. Some taxpayers’ ITRs are consistently showing as Under Processing, others have received Defective Return notices, and many are simply at a loss as to why their refunds have been withheld. In such a scenario, it becomes crucial to understand the reasons for refund delays and how to address them.
Increasing Complaints on Social Media
Taxpayers are expressing concern, stating that their refunds have been held up for long periods due to filing revised returns, reporting capital gains, including foreign investments, or having multiple income sources. Some have received their refunds, while others have been waiting for months. Tax experts say that files with high CTC, multiple income sources, and complex investments require more scrutiny, slowing down processing.
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Five main reasons for refund delays
The tax department typically conducts additional scrutiny on refunds exceeding ₹1 lakh. Complex returns, such as those involving foreign income or capital gains, require manual verification, which results in refunds being withheld. A notice of defective return under Section 154 prevents refunds from being disbursed until the ITR is refiled with new information.
Sometimes, government cash flow constraints also slow down refund disbursements. If someone files a revised return, the system takes longer to verify the new data.
Which returns are processed faster?
Simple forms like ITR-1 are processed quickly, while complex returns like ITR-2 and ITR-3 may take longer. Therefore, it is important that taxpayers carefully check the status of their returns on the portal to ensure no notices or additional information have been requested.
Other Reasons for Refund Delays
Small mistakes by taxpayers often lead to significant refund delays. If the ITR is not verified after filing, the return becomes invalid, and the refund is not issued. The department withholds refunds if there is a mismatch between the income or tax credits shown in Form 26AS, AIS, and ITR. Even minor discrepancies in the amounts reported by the bank, employer, or financial institution can cause delays. In such cases, it is important to correct the mismatch by filing a complaint on the CPC portal.
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ITR Filing Deadline and Related Rules
The deadline for filing ITR for non-audit cases for the financial year 2024-25 was September 16, 2025, but was extended twice due to technical issues with the portal. Those who failed to file their returns on time can file a belated return until December 31, 2025, but will be subject to a late fee. Filing your return before the end of the year is crucial to avoid any penalties or notices.
What to do if your refund is stuck
The first step is to ensure that your ITR has been verified, as without verification, the return becomes invalid. Next, reconcile Form 26AS and AIS with the ITR. If you find any mismatches, file a complaint on the CPC portal. If a revised return has been filed, be patient, as processing times in such cases are longer.
Refund delays are not uncommon, but awareness and providing accurate information can speed up the process. Keep documents updated, respond to notices promptly, and monitor your refund status on the portal. This increases your chances of receiving your refund.
