As millions of Indian taxpayers rush to file their income tax returns (ITR) for the Assessment Year (AY) 2025-26, many are surprised to find their refunds delayed or withheld. This has raised widespread concern and curiosity, particularly as the income tax department remains firm on its latest guidelines: No refund will be processed unless past assessments are thoroughly verified.
With over 75 lakh ITRs already filed and 71 lakh verified, the unusual delay in refund processing has drawn attention from taxpayers, consultants, and media alike. In this comprehensive article, we explain why the income tax department is taking longer this year, what it means for honest taxpayers, and how to stay informed during this process.
ITR Filing for AY 2025-26 Begins Amid Changes
A Late Start to the Tax Season
The process of filing income tax returns for AY 2025–26 officially began at the end of May 2025, a noticeable delay compared to previous years. This pushed the start of the tax season almost a month later, already compressing the time available for taxpayers to file their returns before the July 31 deadline.
Although taxpayers have adapted to the delay, the income tax department has introduced another hurdle: refunds are not being issued immediately after e-verification, as they were in the past.
ITR Verification vs. Processing: The Gap Widens
According to the official website of the Income Tax Department, more than 75 lakh returns have been filed this year, with over 71.1 lakh already e-verified. However, unlike previous years, the department has stopped displaying the number of returns processed on its public dashboard. This change has led to speculation and concern, especially among those eagerly awaiting refunds.
A previously visible metric, the number of ITRs processed, has now disappeared from the site. This absence has been noted by financial professionals and tax advisors who depend on such transparency to guide their clients.
Why Is the Income Tax Department Delaying Refunds?
Crackdown on Fraudulent Claims
Sources within the income tax department confirm that the delay is deliberate. Officials have been instructed not to release any refunds until the past ITRs, assessment records, and pending scrutiny cases of taxpayers are reviewed thoroughly.
According to senior tax consultant CA Suresh Surana, this move is part of a broader strategy to curb fake refund claims, which have seen a significant rise in recent years. By reviewing old returns, the department aims to filter out fraudulent refund requests and protect government revenue.
Refunds on Hold Until Past Returns Are Scrutinized
Impact on Honest Taxpayers
While the strategy may curb tax evasion, it has created unintended consequences for honest taxpayers. Many individuals who file their ITR on time every year, with no legal proceedings or discrepancies in their records, are now left wondering why their refunds are stuck.
According to multiple tax professionals, such blanket scrutiny creates bottlenecks even for compliant individuals. The income tax department has not yet provided a tool or portal where taxpayers can track refund status or get updates on the reason for delays.
Transparency Lacking in Refund Processing
Experts Call for a More Transparent System
Tax experts believe that the income tax department should create a transparent communication channel. A portal or message system indicating why a refund is delayed, whether due to pending assessments, mismatch in filings, or old dues, would ease taxpayers’ concerns.
One senior consultant remarked, “At present, there is no proper system to inform taxpayers about the delay. Many don’t even know whether their refund is under review or completely ignored.”
This communication gap has further increased confusion and frustration during an already delayed tax season.
What We Know So Far: A Summary
Here’s a quick update on the current tax season:
- ITR filing for AY 2025–26 began in late May
- More than 75 lakh returns have already been filed
- Over 71 lakh ITRs have been successfully e-verified
- The number of returns processed is no longer visible on the I-T portal
- No refunds will be issued unless older returns and assessments are verified
- No official communication on estimated refund timelines has been shared
Income Tax Department’s Silent Shift in Policy
This year marks a clear shift in the refund issuance policy of the income tax department. Earlier, once an ITR was e-verified, the refund was usually issued within a few weeks. In many cases, the entire cycle took just 7 to 21 days.
However, this year’s pattern indicates that the income tax department is more focused on data analytics, cross-verification, and fraud detection, which means refunds are taking longer than usual, even for error-free returns.
Possible Reasons Your Refund Is Delayed
If you’ve filed your return and are still waiting, here are some possible reasons the income tax department might be holding your refund:
1. Pending Assessments or Scrutiny Cases
Your older tax filings might be under review or scrutiny, delaying the release of this year’s refund.
2. Mismatch in Form 26AS or AIS
If there are discrepancies in the income reported versus TDS (Tax Deducted at Source) records, refunds are automatically flagged.
3. High Refund Claim
If the amount of refund claimed is unusually high compared to previous years, the return may be flagged for manual review.
4. Technical or System Delays
Since the income tax department is overhauling its digital infrastructure, some system-based delays are also occurring.
How You Can Track Your Refund Status
Although direct processing updates are missing from the portal, you can still use the following methods to check your ITR and refund status:
✔ Via the Income Tax e-Filing Portal:
- Log in to https://www.incometax.gov.in
- Navigate to “e-File” → “Income Tax Returns” → “View Filed Returns”
- Check if your return is under processing or completed
✔ Via NSDL Refund Portal:
- Go to https://tin.tin.nsdl.com/oltas/refundstatuslogin.html
- Enter your PAN and assessment year
- Check the refund dispatch status
However, keep in mind that unless the income tax department completes the internal verification, your refund will remain “under process.”
What Should Taxpayers Do?
While waiting for your refund, here are a few recommended steps:
- Double-check your ITR for any errors or missing disclosures
- Make sure your bank account is pre-validated on the income tax portal
- Review your Form 26AS, AIS, and TIS for consistency
- Stay informed by following news and updates from the income tax department
If your refund is critical (e.g., you’re awaiting a large amount), you can raise a grievance request through the e-filing portal or connect with a registered tax consultant.
Looking Ahead: Will Refunds Improve in the Future?
The income tax department is expected to refine this year’s refund scrutiny process using AI-driven analysis and real-time data monitoring. If successful, the system will automatically clear low-risk returns and flag only the high-risk ones for manual review.
This could mean faster refunds for compliant taxpayers in future assessment years. But for now, AY 2025–26 appears to be a transitional year where refund delays are the norm rather than the exception.