Income Tax Refund 2025-26 delay: Tax season often comes with the anticipation of a quick refund. But for Assessment Year (AY) 2025-26, millions of Indian taxpayers are facing unexpected delays in receiving their Income Tax Refunds. Despite over 1.16 crore ITRs filed and 1.09 crore verified, many are still waiting. What’s behind this unusual delay?
Let’s decode the key reasons and guide you on what steps to take if your refund is stuck.
Why Is Your Income Tax Refund 2025-26 Delay This Year?
1. Late Release of ITR Utilities
Traditionally, the Income Tax Department releases the ITR utilities by April. This year, however, ITR-1 and ITR-4 utilities were released only on May 30, and ITR-2 and ITR-3 on July 11. Due to this delay, many taxpayers started filing much later, pushing back the overall processing timeline.
2. Frequent and Complex Tax Rule Changes
From July 2023 to February 2025, multiple changes were made to income tax laws:
The new tax regime became the default.
Updated disclosure requirements were introduced in the ITR forms.
AIS (Annual Information Statement) and Form 26AS are now more detailed, and every piece of data must match precisely.
These revisions, though aimed at transparency, have slowed down return processing significantly.
3. Incomplete Availability of ITR Forms
By mid-July 2025, ITR-5, ITR-6, and ITR-7 utilities were still not available, leaving many businesses, trusts, and other entities unable to file their returns on time. Consequently, the ITR deadline was extended to September 15, 2025, instead of the usual July 31.
4. Tighter Scrutiny and Data Matching
The Income Tax Department has enhanced its verification processes:
Returns are matched against AIS and Form 26AS.
Any mismatch or unusually high refund claims are flagged.
Flagged returns undergo manual verification, delaying the refund.
5. Pending Tax Assessments or Old Dues
If your past returns are under scrutiny or you have unpaid tax demands from previous years, the department may adjust or withhold your current refund. This is legally allowed and frequently applied.
Is Your ITR Under Investigation?
If your return is flagged for additional scrutiny:
It doesn’t always mean you’ve made an error or committed fraud.
Often, it’s due to mismatched data between your ITR, AIS, or Form 26AS.
High-value transactions, incorrect bank interest reporting, or forgotten income disclosures can trigger this.
The Income Tax Department will usually notify you via SMS, email, or the e-filing portal if your ITR is under review or requires action.
What to Do If Your Refund Is Delayed?
Here are some practical steps to take if your refund hasn’t arrived within 4-5 weeks after e-verification:
✅ Check Refund Status Online
Visit the Income Tax e-filing portal.
Go to “View Filed Returns” → “Refund/Demand Status”.
This will tell you whether the refund is approved, under process, or withheld.
✅ Ensure Bank Account Is Validated
Your bank account must be pre-validated and linked with PAN.
You can check and validate this under “Profile Settings” on the e-filing portal.
✅ Raise a Grievance
Use the e-Nivaran section on the portal to lodge a formal complaint about the delay.
Include return details, filing date, and bank information for faster resolution.
✅ Escalate If Needed
If there’s no response, escalate your case to the Centralized Processing Centre (CPC) or your jurisdictional assessing officer through the portal.
Will You Get Interest for the Delay?
Yes! Under Section 244A of the Income Tax Act, the department is required to pay interest on delayed refunds.
If the refund is delayed beyond 3 months from the date of return processing, interest is paid at 0.5% per month.
This interest is automatically calculated and included in your refund amount.
How to Avoid Refund Issues Next Time?
File early once utilities are available.
Always reconcile income, deductions, and TDS with AIS and Form 26AS before filing.
Avoid excessive refund claims unless they are accurate and backed by documents.
Respond promptly to any notices or discrepancies raised by the department.
Conclusion: Stay Alert, Stay Informed
The AY 2025-26 refund delays are the result of a perfect storm — late ITR utility releases, ongoing rule changes, data mismatches, and backlogs from prior years. While the wait can be frustrating, taxpayers should remember that the system is also offering more transparency and fairness.
Keep monitoring your refund status, ensure your filings are accurate, and don’t hesitate to raise concerns through official channels. Your patience, backed by proactive action, can make all the difference.