Income Tax Refund Delays: The income tax return filing deadline came to an end on July 31, with over 7 crore taxpayers filing their returns within the set time-frame. As per the Income Tax Department’s website, 7.42 crore returns have been filed as of August 21, of which 7.10 crore ITRs are verified. Of these verified ITRs, 5.15 crore returns have been processed by the tax department. It means that there are around 2 crore ITRs which are yet to be processed. The government has claimed that the ITR processing time has come down to less than 10 days now from 53 days in 2014. So, are all ITRs getting processed and refunds being issued within 10 days of filing returns? Not really. There are many taxpayers who still await their tax refunds. So what are the reasons behind this delay?

One of the reasons for the delay in ITR processing is the type of ITR form chosen by the taxpayer to file income tax returns. ITR-1 or ITR-4 are usually processed faster than ITR-2 and ITR-3, according to tax experts.

Another reason why tax refunds are getting delayed for some taxpayers is that their refund claims are large so they need rigorous checks and balances by the tax authorities, experts opine.

Also read: Income Tax Refund: How to check your ITR Refund status and what to do if refund is delayed?

Apart from these, it sometimes comes to the notice of the tax department certain discrepancies in the data provided in the tax return, such as mismatches in reported income or tax credits. Such errors require re-verification by taxpayer post communication from the tax department.

As a taxpayer one must understand these factors as they can help in managing one’s expectations and preparing for any potential delays in receiving their refunds.

However, taxpayers must note that the statutory timeline for processing of ITRs for AY 2024-25 is December 31, 2025, which means the tax department can take that much time to process ITR in case there is a valid reason to put on hold any specific ITR.

What happens when ITR is verified and tax refunds get delayed?

When an income-tax return is filed within the prescribed due date, the taxpayer is entitled to interest at 0.5% per month or part of a month, calculated from April 1, 2024, until the date of the refund. If there is a delay in filing the return, interest is payable from the date the ITR is furnished to the date of the refund. However, no interest is payable by the Income Tax Department if the refund amount due is less than 10% of the actual income tax liability.

What to do if tax refund is delayed?

If your refund is delayed beyond the usual processing time, you can contact at 1800-103-4455 or email them at mailto:ask@incometax.gov.in.

In persistent cases, you might consider visiting your local Income Tax Office to inquire about the delay.

If all else fails, you can also lodge a grievance on the e-filing portal under the ‘e-Nivaran’ section. This is a formal way to escalate your issue and seek resolution.

Regularly checking your refund status and promptly addressing any issues can save you time. Tracking and managing your tax refunds has become more accessible than ever for taxpayers.