⏳ Why Are ITR Refunds Delayed This Year? Here’s What Taxpayers Need to Know

Income Tax Return (ITR) filing season often brings a mix of relief and anticipation—relief for completing the filing process, and anticipation for receiving the tax refund, if eligible. However, for many taxpayers this year, the wait has been unusually long. Even after successful filing and verification, refunds are being delayed beyond the typical timeline, causing concern and confusion among individuals, professionals, and businesses.

If you are also wondering why your ITR refund is yet to arrive, this detailed explanation will help you understand the root causes, what’s different this year, and what you can do about it.

1. Reduced Processing Speed at CPC Bengaluru

The Centralized Processing Centre (CPC), Bengaluru, is responsible for processing almost all individual income tax returns across the country. This year, the overall processing speed has slowed due to:

  • Increased volume of filings during the deadline weeks

  • System optimisation and backend upgrades

  • Higher scrutiny triggered by new risk assessment rules

When the CPC experiences load congestion, priority naturally goes to cases with zero discrepancies. Even minor mismatches can push certain returns into manual review, contributing to delays.

2. Delay in Release of Updated ITR Utilities & Schema Changes

In the current financial year, the Income Tax Department released revised versions of:

  • ITR utilities (Excel/Java/JSON)

  • Schema updates

  • Form instructions

These changes came later than usual, leading to slower adoption and integration by taxpayers and consultants. As a result, a large number of returns were filed closer to the deadlines, creating a processing bottleneck.

Additionally, those who filed earlier using older utilities sometimes experienced data validation issues, causing their returns to enter the “Pending for Processing” stage for weeks.

3. AIS & TIS Mismatches Delaying Refunds

One of the biggest reasons this year is mismatches in:

  • AIS (Annual Information Statement)

  • TIS (Taxpayer Information Summary)

  • Form 26AS

If the income declared in the return does not match the data reflected in AIS—particularly for transactions like:

  • Interest income from multiple banks

  • Dividend payouts

  • Share market trades

  • Rent received through tenants

  • High-value transactions (credit card spends, investments)

— then the system sends the return for additional verification.

Even small mismatches (sometimes as low as ₹200) can cause refunds to be withheld until reconciliation is completed.

4. Higher Scrutiny for High-Value Returns

The department has increased monitoring of:

  • Salaried individuals claiming large deductions

  • Professionals with inconsistent income trends

  • Taxpayers reporting major TDS but low income

  • High-volume stock market traders

  • Individuals with high cash deposits or foreign income

Such returns undergo enhanced scrutiny using AI-driven risk parameters before refunds are released. This is part of the government’s push for data verification before settlement, reducing post-refund adjustments.

5. Pending e-Verification or Bank Account Validation

Many taxpayers unknowingly face delays due to incomplete procedural steps such as:

  • Not completing e-verification of the ITR

  • Using a bank account that is not pre-validated or ECS-enabled

  • Mismatched PAN–bank details

  • Old or inactive bank accounts selected for refund

Even if the return is processed, the refund will not be credited until the bank account validation is fully compliant.

6. Returns Sent to Jurisdictional AO for Review

Some cases are transferred to the Assessing Officer (AO) for manual review, especially when:

  • Income shows abnormal deviations compared to previous years

  • Large deductions under Section 80C, 80D, 80G are claimed

  • Refund claim amount is unusually high

  • Past notices or pending demands exist

In such situations, refunds are released only after AO approval, which may take several weeks—or months.

7. Backend Security Filters & Automated Risk Alerts

This year, the Income Tax Department has introduced stronger filters to identify:

  • Fake TDS claims

  • Inflated deductions

  • Mismatched income sources

  • Incorrect HRA or LTC claims

  • Bogus capital loss set-offs

Returns flagged by these filters are temporarily paused, even if the taxpayer has filed correctly. The system performs cross-checks using data from banks, mutual funds, GSTN, EPFO, and registrar offices.

What You Can Do If Your Refund Is Delayed

Here are a few steps to ensure smooth processing:

✔ Check refund status on the Income Tax Portal

Navigate to Services → Refund Status to monitor updates.

✔ Compare ITR with AIS/TIS & Form 26AS

Ensure there are no mismatches in income or TDS.

✔ Verify your bank account

Confirm it is pre-validated and linked to PAN.

✔ Reply to any notices

Even minor queries such as Section 143(1)(a) adjustments must be addressed quickly.

✔ Consult a tax professional

If your refund is stuck for months or in “Under Processing,” expert assistance helps detect hidden issues.

Conclusion

ITR refund delays this year are largely due to system upgrades, higher verification standards, AIS mismatches, and increased scrutiny to ensure accuracy before issuing refunds. While the wait can be frustrating, understanding the reasons can help you take corrective measures and avoid such delays in the future. Filing accurate, discrepancy-free returns and keeping all records updated is the best way to ensure faster refunds going forward.

If you need help reviewing your ITR or resolving refund delays, professional support can make the process smooth and stress-free.

📞 Contact us today: +91 7305701454
📧 Email: auditsiva2@gmail.com
🌐 Website: www.taxlaservices.com

#TaxlaServices #ITRRefundStatus #IncomeTaxIndia #TaxFilingInChennai #AITMismatch #RefundDelay #TaxConsultant #BestAuditorInTamilnadu



Comments

Post a Comment

Popular posts from this blog

🧾 TDS Payment (AO Permitted) – Due Date Alert!

Image
Deadline: 7th July 2025 | Period: April–June 2025 Tax deductors and businesses—this is a timely reminder! If you're permitted to deposit TDS quarterly by your Assessing Officer (AO) under certain provisions of the Income Tax Act, the due date for the April–June 2025 quarter is fast approaching. 🔍 What is AO-Permitted Quarterly TDS Payment? Under normal circumstances, TDS must be deposited monthly. However, specific deductors can obtain permission from the Assessing Officer (AO) to deposit TDS on a quarterly basis —typically to reduce compliance burden for eligible deductors. Quarterly TDS deposit is permitted under the following sections : Section 192 – Salary payments Section 194A – Interest (other than securities) Section 194D – Insurance commission Section 194H – Commission or brokerage If you have this quarterly permission , the due date for April to June 2025 TDS payment is: 🗓 7th July 2025 🚨 What Happens If You Miss the Deadline? Failure to...
Read more

New Tax Rule Alert! – Tax Officials Can Access WhatsApp & Email During Searches

Image
The Government of India has introduced a significant provision under the New Income Tax Bill 2025 , granting tax officials the authority to access digital communication platforms like WhatsApp, email, and cloud storage apps during search and seizure operations . 📜 Key Provisions of the Rule: Expanded Access Rights Tax officials can now inspect your WhatsApp chats, email inbox, cloud storage files, and installed applications on your devices during income tax searches. This move aims to enhance investigation efficiency and curb tax evasion through digital means. Parliamentary Panel Approval A Parliamentary Standing Committee reviewed the clause and raised no objections in its official report dated 21 July 2025 . The inclusion of this clause highlights the government’s focus on modernizing enforcement by including digital evidence in tax cases. Applicable During Official IT Raids Access is permitted only during authorized searches under Section 132 of the...
Read more

ITC Blocked in Many Cases – Know When You Can’t Claim It

Image
  The Goods and Services Tax (GST) regime allows businesses to claim Input Tax Credit (ITC) on the tax paid for goods and services used in the course of business. This mechanism helps avoid double taxation and ensures a seamless flow of credit through the value chain. However, the GST law also prescribes certain situations where ITC cannot be claimed . These restrictions are outlined in Section 17(5) of the Central Goods and Services Tax (CGST) Act, 2017 . Understanding these rules is crucial for businesses to remain compliant and avoid penalties or unnecessary tax demands. What is Input Tax Credit (ITC)? ITC allows a registered taxpayer to reduce the GST they have paid on purchases from the GST they owe on sales. For example, if a business pays GST on raw materials, they can claim it back while paying GST on the final product, thereby reducing the overall tax burden. But remember — ITC is not an unconditional benefit . If the goods or services are not used for business purp...
Read more