Income Tax Refund Delay: 63 Lakh ITRs Still Pending After Deadline, Know Why Refunds Are Stuck and What Taxpayers Should Do
Even after the December 31 deadline, a large number of taxpayers are still waiting for their income tax refunds. According to official data, around 63 lakh Income Tax Returns (ITRs) for the Assessment Year 2025–26 have not yet been processed, leading to delays in refunds and growing concern among taxpayers.
Many taxpayers are worried whether this delay is unusual or a sign of a problem. However, tax experts clarify that the delay is largely due to stricter scrutiny and risk-based processing, not because of any system failure.
How Many ITRs Are Still Pending?
As per figures released by the Income Tax Department, approximately 8.80 crore ITRs have been filed so far for AY 2025–26. Out of these:
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Around 8.66 crore returns have been verified
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Nearly 8.02 crore returns have already been processed
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About 63 lakh returns are still under processing
This means refunds linked to these pending returns are also on hold.
Is Refund Delay a Serious Issue?
Tax experts say this situation is not abnormal. Under the Income Tax Act, the Centralised Processing Centre (CPC) is legally allowed to process returns within nine months from the end of the financial year.
For AY 2025–26, this means the department has time until December 31, 2026, to complete processing. Since more than 90 percent of verified returns have already been processed, the current backlog is still well within the permissible limit.
Why Are Refunds Getting Delayed This Year?
The primary reason for the delay is enhanced verification and data matching. The Income Tax Department now has access to extensive third-party data, including:
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TDS returns
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Annual Information Statement (AIS)
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Form 26AS
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Bank transaction data
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Mutual fund investments
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Specified Financial Transaction (SFT) reports
If the details mentioned in the ITR do not exactly match this data, the return gets flagged automatically, and processing is paused until the discrepancy is resolved.
CBDT ‘Nudge Campaign’ Also Contributing to Delays
Another major factor is the CBDT’s ‘nudge campaign’, launched in December 2025. Under this initiative, taxpayers whose returns show mismatches receive SMS or email alerts asking them to review their filings.
Taxpayers are given an option to either accept the discrepancy or file a revised or updated return. Experts explain that until the taxpayer responds and corrects the issue, the department deliberately holds back processing to ensure compliance.
Technical and Backend Changes Played a Role
Some operational factors also contributed to delays this year. Several ITR forms and utilities for AY 2025–26 were released later than usual, between June and August, affecting both filing and processing timelines.
Additionally, heavy traffic on the income tax portal near the deadline caused login issues and timeouts, further slowing down the system.
Will Taxpayers Get Interest on Delayed Refunds?
Yes, but with certain conditions. Under Section 244A of the Income Tax Act, taxpayers are entitled to interest on delayed refunds.
Key points to note:
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Interest is paid at 0.5 percent per month
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The refund amount must exceed ₹100 or 10 percent of total tax, whichever is higher
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For timely filed returns, interest is calculated from April 1 until the refund date
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For late-filed returns, interest is counted from the date of filing
For example, if a refund of ₹40,000 is delayed by eight months, the interest amount would be ₹1,600.
What Should Taxpayers Do If Refund Is Stuck?
Experts advise taxpayers not to panic and take these steps:
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Regularly check AIS and Form 26AS
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Respond promptly to emails or SMS from the tax department
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File a revised or updated return if any error is found
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Stay patient, as most delays are due to compliance checks
In most cases, refunds are not held back because of wrongdoing by taxpayers, but because the department wants accurate and verified data. Eligible taxpayers will receive their refunds, even if it takes some extra time
