Taxpayers who are not required to conduct an income tax audit needed to file an income tax return (ITR) on or before September 16, 2025. Those who did file their ITR before this due date have seen their ITR been processed quickly. This is especially true if the tax refund amount was smaller or in cases where the ITR was not much complicated like ITR-1, ITR-2 form, etc.
But many taxpayers whose tax refund was of higher amounts have been waiting for a tax refund. What can be the possible reasons for their refund delay, and what can such taxpayers do to get the refund soon? Know here.
Chartered accountant Avinash Kumar Rao, partner at Mohindra & Associates, says that all refunds are processed in a similar manner, but larger refunds can trigger an extra verification step and hence, may get delayed.
Avinash said, “The laws say that refunds are processed in a similar manner & the same rules apply across amounts. While larger refunds can trigger extra verification steps, the amount alone is never the sole reason for a delay. Generally ITRs are processed in batches. While small ITRs, ITR-1 & ITR-4, can be processed quickly, ITR-2 and ITR-3 can take some additional time.”
As of September 23, more than 7.57 crore ITRs have been filed. Out of these, nearly 6.87 crore have been verified, and over 5.01 crore have already been processed. That still leaves nearly 1.86 crore returns pending, which means refunds in those cases are yet to be issued.
Chartered accountant Tarun Kumar Madaan says that high-value refunds may sometimes face extra checks and may get delayed, but even small-amount refunds can get delayed.
“Delays are not always about the refund amount. While high-value refunds may sometimes face extra checks, we have also seen refunds of smaller amounts (up to Rs. 10,000) credited the very same day the ITR is e-verified. On the other hand, many returns filed after mid-July are still waiting to be processed,” said Tarun.
Tarun says a tax refund delay can also happen because of mismatches between different forms filed by a taxpayer. “Delays also happen when there are mismatches between Form 26AS/AIS/TIS and what’s reported in the return. In such cases, the department raises adjustment notices, and timely response by taxpayers is crucial.”
Avinash says that other reasons why your tax refund can be delayed are-
E-verification not completed: The return must be verified within 30 days after filing the return. Because the return processing cannot begin unless the return filed is verified.
Unvalidated bank accounts: The refund cannot be sent until the taxpayer’s bank account is pre-validated and linked to PAN.
Outstanding demands: The department can offset the refund against previous tax dues under Section 245(1).
PAN–Aadhaar issues or suspect claims: Unlinked PANs and unusually high deductions may trigger some additional checks.
What happens when your tax refund is delayed?
Naveen Wadhwa, vice president, Research and Advisory Division at Taxmann says: “If a refund arises from TDS, TCS, or Advance Tax paid during the financial year, the interest shall be calculated at the rate of 0.5% for every month or part of a month. However, no interest shall be payable in this circumstance if the amount of refund is less than 10% of the tax determined on summary assessment or regular assessment.”
Naveen says that if the refund arises out of self-assessment tax during a financial year, then the interest shall be calculated at the rate of 0.5% for every month or part of a month.
“However, no interest shall be payable under this clause if the amount of refund is less than 10% of the tax determined on a summary assessment or regular assessment. The interest shall be payable from the date of filing of the return or payment of tax, whichever is later, to the date on which the refund is granted,” said Naveen.
Can the Income Tax Department withhold your refund?
Avinash says if the proceedings for assessment or reassessment are pending in case of a person, the Income Tax department u/s 245(2) can withhold the refund for a reason recorded in writing and with the previous approval of the Principal Commissioner or the Commissioner.
“Even in such cases, the refund can be withheld up to 60 days from the date on which such assessment or reassessment is made,” said Avinash.
What can a taxpayer do if their refund is getting delayed?
Avinash tells that if your refund is getting stuck for more than a couple of weeks after e-verification, first log in to the e-filing portal and check the refund/demand status. Ensure that your bank account is pre-validated and that there are no mismatch notices. If everything appears in order, then you may follow this process:
File an online grievance in the “Refund” category. The portal will issue an acknowledgement number so you can follow up.
You can also call CPC helpline at these numbers for escalation: 1800 103 0025, 1800 419 0025, +91-80-46122000 & +91-80-61464700 using your PAN details.
You can raise the issue through social media, as the Income Tax Department is taking those grievances. The link to raise such issues is- https://eportal.incometax.gov.in/iec/foservices/#/fo-greivance/submit/ormlanding
Persistent delays can also be escalated through CPGRAMS
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