The wait for the income tax refund has been long for many taxpayers across the country. The Income Tax Department website shows that around 1.23 crore income tax returns so far are yet to be processed. Out of 3.98 crore income tax returns, around 2.74 crore ITRs are processed as of August 31.
The last date to file income tax returns is September 15, 2025, for taxpayers whose accounts are not required to be audited. The earlier deadline was July 31. Even though the deadline has been extended, the pace of ITR filing has not been what was expected. With just 15 more days to go for the deadline, it is to be seen how the ITR filing progresses in the remaining two weeks. As regards taxpayers who have already filed their return, many of them are still deprived of a refund. The question arises as to what the reason is that the refund process is slowing down.
Adjustment from old cases
If a taxpayer has tax arrears of previous years or an appeal is pending, then the department can adjust the new refund in the same arrears. In such cases, the refund is received late or sometimes not received in full.
Investigation on large or suspicious refunds
Experts say that the department conducts additional investigation on refunds involving large amounts or appearing suspicious. In such cases, documents are sought from the taxpayer, which takes time to process.
Backlog in season
During the peak season of ITR filing, the department is burdened with lakhs of files. This creates a backlog in the system and slows down the refund process.
Govt’s reform initiatives
The government has taken several steps to speed up the refund process. Finance Minister Nirmala Sitharaman has recently directed income tax officials to issue refunds on time and increase the confidence of taxpayers. At the same time, the deadline for processing old ITRs (assessment year 2023-24) has also been extended to 30 November 2025. This has increased the hope of settlement of pending cases.
Technical glitches and late ITR forms
Several taxpayers have complained of technical glitches recently. Many times, their data in AIS (Annual Information Statement) and Form 26AS do not match, many taxpayers took to social media to complain.
Apart from this, ITR-1 and ITR-4 were released in May, but ITR-2 and ITR-3 came in July. This not only delayed the return filing but also affected the refund processing.
Problem of bank account and pre-validation
The Income Tax Department transfers the refund directly to the bank account. But due to errors like wrong bank account number, IFSC code or name-PAN mismatch, the amount gets stuck. There are many taxpayers whose account pre-validation is not completed on the portal. The attempt to send a refund to a closed or inactive account also fails.
No e-verification
After filing ITR, it is necessary to do its e-verification. If you do not verify by sending Aadhaar OTP, net banking or ITR-V to CPC-Bengaluru, then the department does not process your file. As a result, the refund is not issued.
Discrepancy in income statement
Many times the information given by the taxpayer in ITR and the data of AIS or Form 26AS with the department do not match. If there is a difference related to TDS, income or investment, the department puts the refund on hold and starts investigation.
Summing up…
Even a common taxpayer who has filed returns on time keeps waiting for refund for months. Whether the reason is technical, bank related or related to old cases — the system needs to be made more fast, transparent and accountable.