ITR Refund Delay Explained, Know The Key Reasons Behind The Hold-Up

New Delhi: More than 1.16 crore Income Tax Returns (ITRs) have already been filed for Assessment Year 2025–26, and over 1.09 crore have been verified. However, many taxpayers are still awaiting their refunds, leading to widespread concern.

Why Refunds Are Getting Delayed This Year

According to CA Dr. Suresh Surana, multiple procedural and technical reasons are causing the delay. One major issue is that ITR utilities—used to file tax returns—were released much later than usual. ITR-1 and ITR-4 Excel utilities were issued on May 30, and ITR-2 and ITR-3 were released on July 11. As a result, filing started late and refund processing began late too.

Frequent Rule Changes Increased Complexity

In the past year, significant changes were made in income tax rules. The new tax regime became the default in Budget 2023, and additional updates followed in July 2024 and February 2025. Key changes include enhanced data collection in ITR forms, expanded AIS and Form 26AS, and stricter credit reconciliation norms—all of which have made filing and processing more time-consuming.

Not All ITR Forms Are Available Yet

Typically, all ITR forms and utilities are released by April-May. But as of now, only ITR-1 to ITR-4 are available. ITR-5, 6, and 7 are still awaited. This has forced the government to extend the filing deadline to 15 September 2025, from the earlier 31 July.

AIS & 26AS Matching Causing Further Delays

This year, the Income Tax Department is closely matching the information provided in the ITR with third-party sources like AIS and Form 26AS. Any mismatch or unusually high refund claims are being flagged for deeper verification. In such cases, refunds are withheld until scrutiny is completed.

Pending Assessments from Previous Years Matter

Another cause for delay is unresolved assessments from prior years. If any past tax demands or mismatches are pending, the department is authorised to adjust or withhold refunds accordingly.

Check Your Refund Status & File Complaints If Needed

If you've filed and e-verified your ITR but haven’t received the refund within 4–5 weeks, you can check the status under “View Filed Returns” or “Refund/Demand Status” on the IT portal. Ensure your bank account is linked and pre-validated. If delays persist, file a complaint through the e-Nivaran facility or contact CPC/your Assessing Officer.

Interest Is Paid on Delayed Refunds

While delays are frustrating, taxpayers should note that under Section 244A of the Income Tax Act, interest is payable on late refunds beyond the prescribed timeline.

news