Income Tax Refund Delay 2025: A large number of taxpayers have filed their income tax returns but have yet to receive their refunds. This is increasing taxpayer anxiety. Why is this delay in receiving ITR refunds so significant?
There are many reasons for the delay in ITR refunds, which are impacting taxpayers’ pockets. This raises the question of whether the interest benefit will be available if the refund is delayed. You can learn the important facts related to the delay in ITR refunds in the article below, which will help clear up any confusion.
What will be the interest benefit if the refund is delayed?
According to information, if there is no deficiency in filing the ITR and the refund is delayed, then the government will provide an interest benefit to taxpayers. Simply put, the refund will be returned with interest.
Under Section 244A of the Income Tax Act, taxpayers receive simple interest at the rate of 0.5% per month for delayed refunds. However, there are certain requirements regarding the date from which the interest will be added. We will clear up this confusion below.
From which date will interest be added?
If taxpayers file their ITR on time, they can claim interest starting April 1, 2025. If the ITR is filed late, interest will be added starting from that date. Interest will continue to accrue even if scrutiny is pending, provided the delay is not your fault. If the refund amount is less than ₹100 or is due to an overpayment of self-assessment tax, no interest will be credited.
Why might a refund be withheld?
Sometimes, refunds are withheld if Form 26AS, AIS, or TIS do not match. This means that refunds can be delayed due to TDS credit errors, such as incorrect TAN, outdated invoices, or differences in net-gross interest. Returns with foreign income, capital gains, multi-source income, or high-value transactions are subject to increased scrutiny.
This often results in delays. If a taxpayer’s PAN becomes inoperative, they will not be able to avail of TDS credit. Furthermore, e-verification is not in place, and the bank account is not active.