ITR Refund Delays: When Will Taxpayers Get Their Money Back

New Delhi, November 25, 2025: Many taxpayers who filed their Income Tax Returns (ITR) for the Financial Year 2024-25 (Assessment Year 2025-26) are facing frustrating delays in receiving their refunds, sometimes months after the filing deadline. While the Income Tax Department has significantly improved processing times in recent years, a recent surge in scrutiny has slowed down the credit process for many.

The Central Board of Direct Taxes (CBDT) has acknowledged the delay, primarily attributing it to a detailed analysis of certain tax filings.

Why are Refunds Getting Delayed?

The primary reason for the hold-up, according to CBDT Chairman Ravi Agrawal, is the department’s increased focus on scrutinizing “high-value” or “red-flagged” claims. This close examination aims to prevent the issue of incorrect or inflated refunds, particularly those involving unusual or questionable deductions.

The department is actively analyzing cases where:

• Wrongful Deductions are Claimed: Returns flagged by the system for claiming deductions that seem ineligible or too high.
• Data Mismatches Occur: The information filed in the ITR doesn’t align with the data available with the department, such as in Form 26AS, Annual Information Statement (AIS), or Tax Information Summary (TIS). Common errors include incorrect TDS/TCS details, wrong section codes, or inconsistencies in reporting income like interest, dividends, or capital gains.
• Missing or Inoperative PAN/Aadhaar Linkage: A key pre-requisite, if your PAN is not linked to Aadhaar or is inoperative, the refund process is immediately halted.
• Unresolved Previous Tax Demands: If you have any outstanding tax dues from previous years, the refund might be adjusted against that demand.
• Bank Account Errors: The bank account is not pre-validated on the e-filing portal, or the bank details (like name or IFSC code) are incorrect.

In some cases, the department has also reached out to taxpayers, suggesting they file a revised ITR if they may have missed or wrongly reported certain details.

Expected Timeline for Pending Refunds

While low-value, straightforward refunds are reportedly being processed faster, the CBDT has indicated that it is working to clear the backlog for the remaining pending refunds. Legitimate payouts are expected to be released by the end of December 2025.

What if Your Refund is Delayed? (Your Rights)

If your refund is delayed through no fault of your own, the Income Tax Act provides for compensation.

• Interest on Delayed Refund: You are entitled to receive simple interest at the rate of 0.5% per month (or 6% per annum) on the delayed refund amount.
• Interest Calculation: If you filed your ITR on or before the due date, the interest is calculated from April 1st of the relevant Assessment Year until the date the refund is granted.

How to Check Your Refund Status and Resolve Issues

Taxpayers should proactively check their refund status and address any discrepancies to expedite the process:

1. Check Status Online:
   • Log in to the Income Tax e-filing portal ($incometax.gov.in$).
   • Navigate to: e-File > Income Tax Returns > View Filed Returns.
   • Select the relevant Assessment Year (A.Y. 2025-26) and click ‘View Details’ to see the status.
2. Verify Bank Account: Ensure the bank account mentioned in your return is pre-validated on the e-filing portal and the details match your PAN records exactly.
3. Check for Notices: Regularly check your registered email, SMS, and the e-filing portal dashboard for any communication or intimations from the department regarding discrepancies or pending actions.
4. Raise a Grievance: If your refund is unduly delayed after processing, you can raise a grievance through the e-Nivaran module on the Income Tax portal for a faster resolution.

It is crucial to e-verify your ITR within 30 days of filing. Without e-verification, the filing process is incomplete, and the refund cannot be processed.