With the Income Tax Return (ITR) filing season now officially over for both audit and non-audit taxpayers, many people are still wondering: Why is my refund delayed?
As of December 11, 2025, more than 8.43 crore ITRs have been filed for AY 2025-26, and 8.3 crore have already been verified. Yet, nearly 75 lakh returns remain unprocessed, and a large number of taxpayers are waiting for their refunds.
To understand the refund delay, it’s important to first understand how taxpayers are categorised and how their processes differ.
Two broad taxpayer categories: Audit and Non-Audit
When it comes to filing income tax returns, taxpayers are broadly divided into two groups:
1. Taxpayers whose accounts must be audited: These include businesses with turnover above the specified threshold, professionals whose gross receipts cross the audit limit, individuals or businesses opting out of presumptive taxation in certain cases and anyone required by the Income-tax Act to get their accounts examined and certified by a Chartered Accountant.
For them, tax audit before filing ITR is mandatory.
2. Taxpayers who do not require an audit: These include salaried individuals, pensioners, small taxpayers with simple income sources, individuals with rental income, those whose business/profession does not cross the audit threshold.
Their process is much simpler as no audit report is required before filing the return.
How the ITR filing timelines differed this year
Non-Audit Category
Original due date: July 31, 2025
Extended twice: finally to September 16, 2025
Returns filed by the deadline: 7.53 crore
Audit Category
Tax audit report due date: November 10, 2025
ITR filing due date: December 10, 2025
Both deadlines are now over
In the last three months, nearly 90 lakh additional returns (mostly audit and belated filings) were submitted, taking the total to 8.43 crore.
Why are tax refunds getting delayed? CBDT chief had explained
Many taxpayers expected quick refunds, but the processing has slowed down. CBDT Chairman Ravi Agrawal recently clarified that the main reason is extra scrutiny of suspicious claims, especially in cases where deductions or exemptions seem inflated.
Key reasons for refund delays
1. Red-flagged deduction claims
The system now automatically flags high-value deductions, claims that do not match available data, and unusual patterns in income declarations. Such returns are kept on hold for manual verification, which slows refund release.
2. Incorrect or excessive claims
The department is checking cases where taxpayers may have claimed deductions they are not eligible for claimed higher amounts than permitted. These require additional review.
3. Mismatch with 26AS/AIS
If income, TDS, or interest details do not match with Form 26AS, Annual Information Statement (AIS), the system does not process the return until the issue is corrected.
4. Communication with taxpayers
In many cases, the tax department has written to taxpayers advising them to file a revised return, correct information they missed or reported incorrectly, and until this is done, the refund remains pending.
5. Bank account issues
Refunds cannot be issued if bank account is not pre-validated and wrong account number or IFSC is entered. These are among the most common reasons for delay.
What happens now after the December 10 deadline?
For taxpayers under the audit category, the regular filing window has closed. But there are still options—though with penalties.
1. Filing a belated return
You can still file your ITR after the deadline, but late filing fee (Section 234F) applies. Up to Rs 5,000 for most taxpayers, Rs 1,000 if total income is below Rs 5 lakh.
Certain benefits cannot be claimed, such as carrying forward losses (except in limited cases)
2. Filing an updated return
Under Section 139(8A), you can file an updated return within 24 months from the end of the assessment year. However, it comes with additional taxes, often up to 25% or 50% of the tax and interest payable.
This option is useful only when income was missed earlier.
3. Consequences of not filing ITR for AY 2025-26
If you ignore filing completely, interest and penalties continue to accumulate. You may receive notices under various sections. Refunds, if any, cannot be claimed later.
When can taxpayers expect refunds?
Although no fixed date is announced, CBDT has made it clear that refunds will be released as soon as verification of red-flagged cases is completed. Taxpayers whose returns are clean, error-free, and fully matched with AIS and 26AS will get refunds faster.