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

Why Many Taxpayers Are Facing Delays in Income Tax Refunds: Key Reasons and Solutions

Delays in income tax refunds have become a common concern for many taxpayers this year. Across social media platforms, people are repeatedly asking why their refunds are still pending even weeks or months after filing their Income Tax Return (ITR). Some taxpayers are seeing the return status stuck on “Under Processing,” while others have received notices flagging their return as “Defective.” Many are confused about the real reason behind the delay and unsure of the steps they should take to resolve it.

Rising Complaints Across Social Platforms

Over the past few months, complaints related to refund delays have increased significantly. A large number of taxpayers have posted that they filed a revised return, or their ITR includes entries related to foreign investments, capital gains, or advance tax — all of which tend to slow down the processing timeline.

Tax experts also confirm that refund timelines vary widely based on the complexity of the return. While some taxpayers receive refunds within days, others wait for months. High-value salaries, multiple income sources, or complex investment reporting often lead to additional verification, which slows the process.

Top Reasons Why Income Tax Refunds Get Delayed1. High-Value Refunds Require Additional Verification

Refunds exceeding ₹1 lakh typically undergo stricter scrutiny. The Income Tax Department performs additional checks to verify the accuracy of income details, deductions, and tax credits before approving large refunds.

2. Complex ITRs Take Longer to Process

Returns that include foreign income, capital gains, multiple income streams, or high-value investments often require manual verification. Due to heightened compliance checks, these returns naturally take longer to move from “Processing” to “Refund Approved.”

3. Defective Return (Section 154) Notices Halt Refunds

If the system identifies inaccuracies or mismatches in the return, a Defective Return notice is issued. A refund will not be processed until the taxpayer files a corrected and updated return.

4. System Delays and Government-Level Liquidity Issues

At times, refund delays may be linked to administrative challenges or temporary liquidity-related constraints. These can impact bulk refund releases.

5. Revised Returns (Revised ITR) Need More Time

If you filed a revised return, the updated information must be reprocessed from scratch by the system, which extends the timeline.

Which Returns Are Processed Faster?

Simpler returns, especially ITR-1 (Sahaj), generally get processed much faster. Tax experts note that forms like ITR-2 and ITR-3 — which include multiple investments, capital gains, foreign assets, or business income — require deeper system checks, leading to longer refund timelines.

Taxpayers are advised to regularly check their Income Tax e-Filing Portal dashboard to ensure there are no pending notices or verification requirements.

Other Common Reasons for Refund Delays

Refund delays are not always due to system checks. In many cases, small errors made by taxpayers can pause the process indefinitely.

• ITR not verified: If you do not verify your return within the allowed time, it becomes invalid and the refund is automatically withheld.

• Mismatch in Form 26AS or AIS: If tax credits or income details in your ITR do not match data reported by banks, employers, or financial institutions, the refund is paused for clarification.

• Data discrepancies: Even minor differences in reported figures can cause delays. Filing a grievance on the CPC portal often helps resolve these mismatches.

Important Filing Deadlines

For FY 2024–25, the last date to file ITR for non-audit cases was 16 September 2025

, extended twice due to new ITR format changes and technical issues on the portal.
Taxpayers who missed the deadline can still file a Belated Return until 31 December 2025, but with late fees.

Filing before year-end helps avoid penalty complications and ensures timely processing.

What to Do If Your Refund Is Still Delayed

If your refund has not arrived for a long time, here are the steps you should take:

• Confirm whether your ITR is verified.

• Recheck Form 26AS and AIS for mismatches.

• File a grievance on the CPC portal in case of errors.

• Wait patiently if you filed a revised return, as these take longer.

• Respond to any notices immediately to prevent further delays.

Refund delays might be frustrating, but they are not unusual. Staying alert, keeping documents updated, and responding promptly to tax notices can significantly improve the chances of receiving your refund on time. Regularly checking your refund status and ensuring all details match helps ensure a smoother and faster tax refund process.