For millions of Indian taxpayers, the wait for their income tax refund has become longer and more uncertain in 2025. Despite filing their Income Tax Returns (ITRs) well before the deadline, many are still waiting weeks or even months for their refunds to be credited. This article explores the latest trends, reasons behind the delays, and what taxpayers can do to speed up the process.
Recent Trends in ITR Refund Delays
According to recent data from the Income Tax Department, as of November 2025, over 9.2 million returns remain unprocessed out of the 81.8 million filed for FY 2024-25 (AY 2025-26). This backlog has led to a surge in online searches for terms like “income tax refund” and “ITR refund delays,” reflecting widespread concern among taxpayers.
The Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal recently acknowledged that while smaller refunds are being processed quickly, high-value and flagged claims are undergoing more rigorous scrutiny. This has resulted in slower turnaround times for many taxpayers, especially those with complex income profiles or claims involving foreign income, capital gains, or multiple sources of income.
Key Reasons Behind ITR Refund Delays in 2025
1. Stricter Verification Protocols
One of the primary reasons for the delays is the introduction of stricter verification protocols by the Income Tax Department. Returns involving foreign income, capital gains, or multiple income sources are now subject to more thorough scrutiny. Refunds over ₹1,00,000 often undergo additional checks to prevent fraudulent claims and ensure compliance with tax laws.
For example, if a taxpayer claims a large deduction or exemption, the department may flag the return for manual review. This process can take several weeks, especially if the department needs to verify the authenticity of the claimed deductions or exemptions.
2. Data Mismatches and Errors
Data mismatches between the ITR and the department’s records are another major cause of delays. If the amounts declared in the return do not align with Form 26AS, the Annual Information Statement (AIS), or tax credits claimed by employers or banks, the refund process can be stalled until the discrepancies are resolved.
Common issues include:
- Incorrect TAN or Section details
- Outdated challans
- Mismatches between gross and net interest figures
- Inconsistencies between ITR disclosures and data appearing in AIS/TIS
These mismatches often require manual review, which can significantly extend the processing time.
3. System Upgrades and Portal Bottlenecks
The Income Tax Department has introduced several portal improvements and revised validation rules in 2025. While these changes aim to enhance compliance and reduce errors, they have also led to system bottlenecks, especially during peak filing periods. High filing volumes and system upgrades can slow down the processing of returns, particularly for those filed close to the extended deadline of September 16, 2025.
4. Unresolved Notices and Clarifications
When discrepancies or mismatches are found during processing, the Income Tax Department may issue notices to taxpayers requesting clarification or revised returns. Until these notices are addressed, the refund process is put on hold. Taxpayers who fail to respond promptly to these notices may experience further delays.
5. Incomplete E-Verification
Another common cause of refund delays is incomplete e-verification. If the return is not e-verified within 30 days of filing, it becomes invalid, and the refund cannot be processed until verification is completed. Unlinked PANs, unvalidated bank accounts, and outstanding demands also contribute to delays.
Impact on Taxpayers
The delays in ITR refund processing have a significant impact on taxpayers, especially those who rely on refunds for financial planning or to meet urgent expenses. The uncertainty and extended wait times can cause stress and inconvenience, particularly for individuals with complex tax situations.
Moreover, the delays can affect the interest payable on refunds. Under Section 244A of the Income-tax Act, 1961, interest is payable if the refund is delayed beyond the allowed time. For ITRs filed on or before September 16, 2025, interest is calculated from April 1 until the refund is issued. For belated filings, the interest clock starts from the date the return was furnished.
How to Avoid ITR Refund Delays
1. Accurate Filing
Ensure that all information entered in the ITR is accurate and matches the data in Form 26AS and AIS. Double-check details such as TAN, Section codes, and challan numbers to avoid mismatches.
2. Timely E-Verification
Complete the e-verification process within 30 days of filing the return. Use the Income Tax Department’s portal to verify your return and ensure that your PAN and bank account are linked and validated.
3. Respond Promptly to Notices
If you receive a notice from the Income Tax Department requesting clarification or a revised return, respond promptly. Address any discrepancies or mismatches as soon as possible to avoid further delays.
4. Monitor Refund Status
Regularly check the status of your refund on the Income Tax Department’s portal. If your refund is delayed, use the portal’s tools to identify any issues and take corrective action.
What the Income Tax Department is Doing
The Income Tax Department is aware of the delays and is taking steps to address them. CBDT Chairman Ravi Agrawal has assured taxpayers that all legitimate refunds will be released by December 2025. The department is also working to streamline the verification process and reduce the backlog of unprocessed returns.
Additionally, the department has launched a taxpayers’ lounge at the India International Trade Fair (IITF) to provide assistance and guidance to taxpayers facing refund delays. This initiative aims to help taxpayers resolve issues and receive their refunds more quickly.
Conclusion
ITR refund delays in 2025 are primarily due to stricter verification protocols, data mismatches, system upgrades, and high filing volumes. While these measures are intended to enhance compliance and prevent fraud, they have also led to longer wait times for many taxpayers. By ensuring accurate filing, timely e-verification, and prompt response to notices, taxpayers can minimize the risk of delays and receive their refunds more quickly. The Income Tax Department is also working to address the backlog and improve the refund process, with all legitimate refunds expected to be released by December 2025.
For more information on ITR refund status and how to resolve delays, visit the official Income Tax Department portal and consult with a tax professional if needed.
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