Income Tax Refund: Refunds of over 63 lakh people are stuck; know the reason for the delay and when the money will be credited..
If you filed your Income Tax Return (ITR) on time and are still checking your bank account daily to see if your refund has arrived, you're not alone. More than 63 lakh ITRs for Assessment Year 2025-26 are yet to be processed, resulting in delayed refunds for these taxpayers. With the December 31st deadline long past, millions of taxpayers are still waiting for their refunds, naturally causing concern.
How many returns have been processed so far?
According to data available on the Income Tax Department's website, approximately 8.80 crore ITRs were filed for AY 2025-26. Of these, 8.66 crore returns have been verified, and about 8.02 crore returns have been processed.
This means that approximately 63 lakh returns are still under processing, and these are the cases where refunds are being delayed.
Tax experts say that while this delay is certainly frustrating, it is not legally incorrect. Under Section 143(1) of the Income Tax Act, the Income Tax Department has until December 31, 2026, to process returns. Therefore, legally, the department is still operating within the stipulated timeframe.
Why are there delays in return processing?
Several reasons have emerged for the delays in processing returns this year:
1. Data Mismatch
If the information provided in your ITR does not match the data in Form 26AS, AIS, or TIS, your return is held for scrutiny. This is why it takes longer to process.
2. High-Value Refunds
Cases where taxpayers have claimed large refunds or shown deductions such as HRA or under Section 80C that differ from Form 16 are subject to greater scrutiny.
3. New ITR Forms and Changes
This time, several changes were made to the ITR forms (New ITR Forms & Changes), such as:
More detailed information on capital gains
Landlord's PAN for HRA
Details related to home loans
These changes also contributed to delays in system updates.
4. Portal and System Updates
Backend changes and technical issues in the e-filing portal also slowed down the processing speed.
5. Increased Scrutiny
Cases involving foreign assets and fraudulent donations are being subjected to increased scrutiny, which is further delaying the processing of returns.
Who is experiencing the longest delays?
Those claiming large refunds
Those showing deductions different from Form-16
Cases with mismatches in AIS or 26AS
Taxpayers with incomplete bank account verification
However, returns for those whose tax is deducted directly from their salary are usually processed quickly.
Will interest be paid on delayed ITR refunds?
The answer is yes, but with certain conditions. Under Section 244A of the Income Tax Act, interest at the rate of 0.5% per month is paid on delayed refunds.
If the return was filed on time, interest will be paid from April 1, 2025, until the refund is received.
If the return was filed late, interest will be calculated from the filing date.
If the refund amount is less than 10% of the total tax, no interest will be paid.
What should taxpayers do?
If your refund is delayed, make sure to do the following:
Check if your ITR has been e-verified.
Ensure your bank account is validated and linked.
Match your information with AIS and Form 26AS.
Respond promptly to any notices received on the Income Tax portal.
While the delay in refunds may be frustrating, according to the law, the refund for AY 2025-26 can be received until December 31, 2026. So, instead of panicking, ensure your details are correct and keep an eye on the status.
Disclaimer: This content has been sourced and edited from NDTV India. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
