Income Tax Refund: Why are refunds delayed? What should taxpayers do? Learn the full details.

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Income Tax Refund: Taxpayers are worried about the delay in their income tax refunds. Some have received ‘Defective Return’ notices, while others’ returns have been ‘Under Processing’ for months. Learn the real reasons for refund delays and the important steps taxpayers should take now.

Income Tax Refund: For the past few months, a large number of taxpayers have been worried about the delay in their income tax refunds. People are constantly questioning on social media platforms why refunds haven’t been issued even weeks, even months, after filing.

In many cases, returns are showing as “Under Processing,” some have received “Defective Return” notices, while many taxpayers are simply at a loss for the reason for the delay. This begs the question: why are refunds delayed, and what steps should taxpayers take to receive their refunds on time?

Increasing complaints on social media

Delays in tax refunds have become common in the past few months. Many people have written that they have filed revised returns or are awaiting refunds due to complex entries such as foreign investments, capital gains, or advance tax payments.

Many taxpayers have received their refunds, while others have been waiting for months. Tax experts say that factors such as high CTC, multiple income sources, or investment complexity slow down the refund process.

5 Major Reasons for Refund Delays

• The department conducts additional scrutiny on refunds exceeding ₹1 lakh, which delays processing.
• Returns that include foreign income, capital gains, or multiple income sources must undergo manual verification.
• Refunds that receive a ‘Defective Return’ notice under Section 154 may be withheld until a new ITR is filed.
• Sometimes, government liquidity constraints cause large-scale refund delays.
• If you filed a revised ITR, it takes longer for the system to process the new data.

What types of refunds are processed quickly?

Tax experts say that delays in refunds are due to technical scrutiny as well as administrative reasons. The department, especially for high-value refunds, requires additional verification. If there are any defects in the return, the system blocks it and requires the taxpayer to file a new ITR.

Simple return forms like ITR-1 (Sahaj) are generally processed quickly. However, complex forms like ITR-2 and ITR-3 may experience delays. Therefore, it is important that taxpayers periodically check the status of their returns on the Income Tax e-Filing Portal to determine if there are any pending notices or information from the department.

Other Reasons for Refund Delays

• Refund delays can be caused not only by departmental investigations but also by minor errors made by the taxpayer.
• If you fail to verify your ITR after filing, the return becomes invalid and the refund is not issued.
  If the tax credit shown in the return does not match Form 26AS or Annual Information Statement (AIS), the department may withhold the refund.
• Sometimes, even minor discrepancies in the amounts reported by the bank, employer, or financial institution can stall the refund process.
• In such cases, you should visit the CPC portal to file a grievance and resolve the mismatch.

ITR Filing Deadlines and Rules

The last date for filing ITR for non-audit cases for the financial year 2024-25 (FY25) was September 16, 2025. This date was previously extended twice from July 31. First, to September 15, due to major changes to the ITR form. Then, it was extended by one more day, to September 16, due to technical issues with the portal.

Those who have not yet filed their ITR can file a belated return by December 31, 2025. However, they will be subject to a late fee.

Filing your return before the end of the year is essential to avoid penalties or notices.

What to do if your refund is stuck

• If your refund hasn’t arrived for a long time, there’s no need to panic.
• First, check whether you’ve verified your return.
• Then, match the data in your Form 26AS and AIS with your return.
• If there’s a mismatch, file a grievance on the CPC portal.
• If you’ve filed a revised return, be patient. Its processing time is longer.

Delays in tax refunds are not uncommon. But by being vigilant and providing correct information, you can quickly overcome this problem. Keep your documents updated, regularly check your refund status on the portal, and respond promptly to any notices. This increases your chances of receiving your refund quickly.

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