Many taxpayers who have already filed their income tax return for AY 2025–26 are still checking their income tax refund status with little clarity on when the refund will actually be credited. Compared to previous years, tax refunds are delayed across categories, affecting salaried individuals, investors, and even those with business income.
This year, the income tax department has introduced additional verification layers in the refund processing cycle. As a result, refunds that arise due to excess tax paid, advance tax, self-assessment tax, or TDS deducted are taking longer to reach the taxpayer’s bank account.
Why income tax returns are delayed this year
In some cases, the reason is simple and routine. The return may not have been e-verified, making it invalid, or an invalid IFSC code may have been mentioned or incorrect bank account details (such as account number mismatches). In others, the refund may have been issued but failed due to a bank account validation issue. There are also instances where refunds have been adjusted against outstanding tax demands from earlier financial years or if the taxpayer’s bank account is not pre-validated on the income tax e filing portal.
As a result, refunds that arise due to excess tax paid, advance tax, self-assessment tax, or TDS deducted are taking longer to reach the taxpayer’s bank account.
Beyond these routine reasons, the current financial year has seen heightened scrutiny. Returns where deductions claimed, exemption claims, capital gains, or income reported do not match Form 26AS or AIS are undergoing additional checks under the Income Tax Act.
Some common triggers this year include:
- Claims of deductions/exemptions under the old tax regime (past income tax returns)
- High-value transactions reported through AIS
- Mismatches between AIS, Form 26AS and the filed return.
- High refund amount due to excess taxes paid or refund claims
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Department communication is not a notice
Many taxpayers have received emails or messages asking them to review their returns. It is important to understand that this is a communication, not a notice. The department has clarified that if there is no error in your return, you do not need to take any action.
However, if you find a discrepancy, you are allowed to revise your return until 31 December, 2025. Missing this window could lead to interest and penalties later.
Are higher refunds more likely to be held up?
There is no officially stated refund threshold. That said, refunds above ₹10,000 are seeing more delays, with scrutiny becoming more frequent once the refund amount crosses ₹50,000 or ₹1 lakh.
High-value transactions, including property purchases, are also being reported to the department even when they are not required to be disclosed in the return. This does not automatically indicate a problem, but it can slow down refund processing.
When can you expect your refund?
Legally, the department has time until the end of the next financial year to process returns. In practice, refunds used to be credited within a couple of weeks.
This year, the department has indicated that refunds are likely to be released after 31 December, once the revision window closes. Taxpayers who revise their returns due to genuine errors may see faster processing, while others are advised not to make unnecessary changes.
How to check ITR refund status
Taxpayers can regularly check ITR refund status on the income tax portal or the tax e-filing portal using their PAN and the relevant assessment year. The status may show ‘refund adjusted,’ ‘refund failure,’ or ‘refund reissue request required.’
If the refund has failed, correcting bank account details and submitting a refund reissue request usually resolves the issue.
Is this a one-off issue?
Tax experts believe this is largely an exceptional year. Filing utilities were released late, deadlines were extended, and the revision window was shorter than usual. All of this contributed to congestion in processing.
There is also growing scrutiny around deductions under the old tax regime, which has triggered many of the delays. Going forward, timelines are expected to normalise.
A simple checklist to avoid refund delays
Before filing ITR, make sure you:
- Match income details with AIS and Form 26AS, which means TDS refunds match Form 26AS
- Verify all TDS entries
- Cross-check bank statements for unreported income
- Report exempt income even if it is not taxable
- File Form 10-IEA correctly when switching tax regimes
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