ITR Refund Stuck? Know the Top 5 Reasons Your Income Tax Refund Is Delayed This Year

Millions of taxpayers across the country who are still waiting for their income tax refunds have the same question on their minds: Why is the money not coming yet? But many are unaware that even a small mistake can stop the refund process. Simple mistakes like wrong bank details or wrong PAN number can stop the refund instantly. This results in many refunds getting delayed every year.

The most common reason for refund delay is incorrect information in the income tax return. If the bank account number, IFSC code, PAN or address is wrong, then the income tax department will not be able to issue the refund. In such cases, the return cannot be processed further until the correct details are updated, which is where the delay mainly occurs. There are some other reasons-

Additional scrutiny for high-value or suspicious returns

If a return claims a large refund or shows discrepancies in the information, the department manually verifies it. Refunds above Rs 1 lakh, returns of income from foreign sources, capital gains or returns of various sources of income often go through additional checks. Refunds are only released after the claim is confirmed to be valid.

Closed bank accounts or failed pre-validation

Refunds are credited only to active bank accounts previously verified on the portal. If an account is closed, inactive or pre-validation fails, the refund is automatically put on hold. Therefore, taxpayers will have to update their bank details and complete the pre-validation again.

Pending tax demand or delay in e-verification

If the tax demand is pending, the department will issue the refund only after it is paid. Similarly, if e-verification is not completed within 30 days of filing of ITR, the return will not be processed. Any delay in e-verification directly results in a delay in getting the refund.

Discrepancies, Errors or Section 154 Notices

If there is any significant mistake in the return or the information does not match with Form 26AS, AIS or TIS, then the refund is withheld. In some cases, the ITR may be marked as ‘defective’, which delays the refund processing till it is rectified. Occasionally, there may be a short-term financial delay by the department in case of large refunds.

Refund Status Check

Simple returns like ITR-1 and ITR-4 are usually processed quickly. If the refund is delayed, it can be checked by logging in to the e-filing portal and under View Filed Returns. If any notices, pending actions or discrepancies arise, it is important to rectify them immediately.