Lakhs of taxpayers across the country are still waiting for their income tax refunds, leading to concerns over the unusual delay this year. The Central Board of Direct Taxes (CBDT) has acknowledged the issue and explained the reasons behind the hold-up on some claims.
According to CBDT Chairman Ravi Agrawal, the Income Tax Department is currently carrying out deeper evaluation of certain refund requests that have either been tagged as high-value or flagged by automated systems for possible inconsistencies.
Scrutiny On Suspicious Claims
Officials say the majority of smaller refunds have already been issued. However, some taxpayers are believed to have claimed excessive or incorrect deductions, prompting additional verification before the release of funds. Agrawal added that this process is essential to stop ineligible payouts and maintain transparency in the taxation framework.
“Low-value refunds are being released. We have analysed and found that some wrong refunds or deductions were being claimed. So, this is a continuous process. We hope to release the remaining refunds by this month or by December,” Agrawal told reporters recently after he inaugurated a taxpayers’ lounge at the ongoing India International Trade Fair (IITF).
Will Taxpayers Get Interest For Delayed Refunds?
Concerned taxpayers can take some relief in knowing that delays do not necessarily mean financial loss. Under Section 244A of the Income Tax Act, the department is required to pay 6% interest per annum on delayed refunds, starting from the date the refund becomes due — as long as the delay is not because of incorrect filings or missing details.
In another provision, Section 437 (1) states that an interest of 0.5% per month is payable on due refunds. The law clarifies, “Where a refund is due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the refund, simple interest thereon calculated at the rate of 0.5% for every month or part of a month…”
This means that even with higher scrutiny this year, genuine refund claimants should automatically receive interest without needing to file a separate request.
What Taxpayers Should Do Next
Tax experts advise filing accurate returns and responding quickly if the department raises a query. Any mismatch in information can pause both the refund and the interest calculation period.
While the wait has been longer than usual for many, CBDT has assured that pending refunds are likely to be credited by the end of this month or December at the latest — provided all verification stages are cleared.