Many taxpayers who filed their income tax returns (ITR Refund Delays) for FY 2024-25 (AY 2025-26) are seeing unusual delays in getting their refunds, even though most routine refunds have already been processed by the Income Tax Department. The Central Board of Direct Taxes (CBDT) has acknowledged the issue and its Chairman, Ravi Agrawal, has publicly clarified why some refunds are stuck and when taxpayers can expect the money.
Key reasons for ITR refund delays
CBDT has clearly indicated that the core reason for the delay lies in enhanced scrutiny of certain refund claims, especially those tagged as high-risk. The system is red-flagging cases where claims look unusual, large, or technically incorrect, and these are being manually examined before any refund is released.
Major factors behind delays include:
- High-value or “red-flagged” refunds that the system marks as risky and sends for deeper verification.
- Wrongful or excess deduction claims under various sections, where taxpayers have either misreported or over-claimed deductions or exemptions.
- Mismatch between TDS/TCS data in Form 26AS/AIS and the figures reported in the return, which forces the department to pause and verify.
Officials have also noted that refund outgo is down by around 18% this year, partly because rationalised TDS rates and better upfront reporting have reduced the number of refund claims overall. This, however, does not change the fact that some genuine refunds are temporarily held up due to these checks.
When will delayed refunds be credited?
CBDT Chairman Ravi Agrawal has assured that legitimate pending refunds for AY 2025-26 are expected to be cleared by the end of November or December 2025. He has stressed that low-value, straightforward refunds without discrepancies are already being released as usual, and the backlog lies mostly in cases under additional scrutiny.
In simple terms:
- Simple, low-risk returns: Typically processed quickly, many already credited.
- High-value / flagged returns: Likely to be processed and paid out by end of November or during December 2025, if the claims are found to be genuine.
Authorities have reiterated that all “legitimate payouts” will be honoured, and the aim is to complete most pending cases within this period.
How interest on delayed refunds works
If there is an undue delay in issuing a genuine refund, the Income Tax Department generally pays interest on the refund amount as per the Income-tax Act, provided statutory conditions are met. This interest is calculated from a specified date after the end of the financial year or from the date of filing, depending on the section applicable and the nature of the refund.
However, taxpayers should note:
- Interest is not paid for delays caused by incomplete, defective, or unverified returns until those issues are rectified.
- Any interest received is itself taxable and must be reported under “Income from other sources” in the subsequent return.
Therefore, while delays can be frustrating, eligible taxpayers may receive some compensation in the form of statutory interest once the refund is finally processed.
Steps to check your ITR refund status online
You can track your ITR refund using the official Income Tax e-filing portal and other authorised platforms.
Method 1: Income Tax e-filing portal
- Visit the e-filing portal at incometax.gov.in and log in using your PAN and password (Aadhaar–PAN linkage may be required).
- Go to the e-File menu, select “Income Tax Returns”, and click on “View Filed Returns”.
- Choose the relevant Assessment Year (AY 2025-26) and click “View Details” to see your refund status and life cycle of the return.
This page typically shows whether the return is processed, the refund amount, mode of payment, and any failure or reissue status.
Method 2: NSDL / Protean refund status page
- Go to the NSDL/Protean refund status page for PAN-based refund tracking.
- Enter your PAN, select Assessment Year 2025-26, fill the captcha and submit to view the latest refund status, including date, mode of payment, and amount, if processed.
Method 3: Through Form 26AS / TRACES
- Log in to the e-filing portal and navigate to the “View Form 26AS” section, which redirects to TRACES.
- Select AY 2025-26 and view the tax credit statement to see whether any refund has been paid, the date, and the credited amount.
Using more than one method helps cross-check whether the refund is sanctioned and whether there was any failure or return of credit by the bank.
What you should do if your refund is delayed
Tax experts and the department advise taxpayers not to panic if their refunds are delayed but to proactively verify their data and respond to any notices.
Practical steps include:
- Re-check your ITR for errors, especially deduction claims, mismatched income figures, or incorrect bank details, and file a revised return if you spot mistakes.
- Ensure your bank account is pre-validated and linked correctly on the e-filing portal, as refunds can fail if account details are wrong or inactive.
- Regularly log in to the portal to see if any communication, notice, or clarification request has been issued under relevant sections.
If the delay appears unreasonable and there is no defect or notice, you may also lodge a grievance via the e-filing portal, providing details of your filed return and pending refund. This creates an official trail and may help get specific action or clarification from the department.
CBDT’s broader stance and what it means for taxpayers
The CBDT has emphasised that the current tightening is aimed at curbing wrongful refunds and misuse of deduction provisions, not at withholding genuine refunds. Officials have reported that the tax system has become more efficient overall, with higher disposal of appeals and more accurate TDS collections, which in turn is reducing unnecessary refund cycles.
For honest taxpayers, the message is two-fold:
- Genuine refunds are expected to be cleared by the end of November or December 2025, and smaller, clean returns are already seeing timely credits.
- Going forward, accurate reporting, matching AIS/26AS data, and making defensible deduction claims will be critical to avoid being flagged and facing similar delays.
In short, FY24-25 refund delays are primarily a by-product of stricter verification of suspicious claims, but those who have filed correct returns with proper documentation can reasonably expect their refunds within the timeline CBDT has publicly indicated.