Income Tax Refund: Why is there a delay in receiving income tax refunds? Learn the details.

For the past few months, a large number of taxpayers have been frustrated by the delay in their income tax refunds. People on social media platforms are constantly questioning why refunds haven’t been issued even weeks, or even months, after filing their returns.

In many cases, returns are showing as ‘Under Processing,’ some have received ‘Defective Return’ notices, while many taxpayers are simply at a loss for the reason for the delay. This begs the question: why are refunds delayed, and what steps should taxpayers take to ensure they receive their refunds on time?

Rising complaints on social media

Delays in tax refunds have become common in the past few months. Many people have written that they have filed revised returns or are waiting for refunds due to complex entries such as foreign investments, capital gains, or advance tax payments.

Many taxpayers have received their refunds, while others have been waiting for months. Tax experts say factors like high CTCs, multiple income sources, or investment complexity can slow down the refund process.

5 major reasons why refunds get stuck

The department conducts additional scrutiny on refunds above ₹1 lakh, which delays processing.
Returns that have foreign income, capital gains or multiple income sources have to undergo manual verification.
On receipt of a notice of ‘Defective Return’ under Section 154, the refund may be withheld until a new ITR is filed.
Sometimes, there are large scale delays in refunds due to lack of government cash flow (liquidity).
If you have filed a revised return (Revised ITR), it takes more time for the system to process the new data.

What types of refunds are processed faster?

Tax experts say that refund delays are due to technical scrutiny as well as administrative reasons. The department has to perform additional verification, especially for high-value refunds. If there are any defects in the return, the system blocks it and the taxpayer is required to file a new ITR.

Simple return forms like ITR-1 (Sahaj) are generally processed quickly. However, complex forms like ITR-2 and ITR-3 can experience delays. Therefore, it’s important for taxpayers to periodically check the status of their returns on the Income Tax e-Filing Portal. This will help determine if there are any pending notices or information from the department.

Other reasons for refund delays

Delay in refund can be not only due to departmental investigation but also due to minor mistakes made by the taxpayer.
If you do not verify your ITR after filing it, the return becomes invalid and refund is not issued.
If the tax credit shown in the return does not match with Form 26AS or Annual Information Statement (AIS), the department can withhold the refund.
Sometimes even a minor difference in the amount reported by the bank, employer or financial institution stalls the refund process.
In such cases, you should visit the CPC portal and lodge a grievance and resolve the mismatch.

ITR filing last dates and rules

The last date for filing ITR for non-audit cases for the financial year 2024-25 (FY25) was September 16, 2025. This date was previously extended twice from July 31. First, to September 15, due to major changes in the ITR form. Then, it was extended by one more day, to September 16, due to technical issues with the portal.

Those who have not yet filed their ITR can file a belated return by December 31, 2025. However, they will have to pay a late fee for this.

It is important to file your return before the end of the year so that you can avoid penalty or notice.

What to do if your refund is stuck

If your refund hasn’t arrived for a long time, there’s no need to panic.
First of all, check whether you have verified the return or not.
Then match the figures given in your Form 26AS and AIS with your returns.
If there is any mismatch, file a grievance on the CPC portal.
If you filed a revised return, be patient. Its processing time is longer.

Delays in tax refunds are not uncommon. However, by being vigilant and providing accurate information, you can quickly overcome this problem. Keep your documents updated, regularly check your refund status on the portal, and respond promptly to any notices. This will increase your chances of receiving your refund quickly.

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Income Tax Refund: Why is there a delay in receiving income tax refunds? Learn the details.

Income Tax Refund: Taxpayers are worried about the delay in their income tax refunds. Some have received ‘Defective Return’ notices, while others’ returns have been ‘Under Processing’ for months. Learn the real reasons for refund delays and the important steps taxpayers should take now.