Refunds on Hold: Why Your ITR May Take Longer to Pay You Back This Year

India's return season for income tax is in top gear, with more than 75 lakh returns filed and more than 71 lakh e-verified. But even as the numbers appear as good as they could, experts caution that refunds might not be as quick as last year. A combination of delayed form releases, increased scrutiny, and backend glitches is slowing the process—keeping massive numbers of taxpayers in the dark.

Filing Highlights

ITR season for AY 2025-26 commenced almost a month behind schedule, only during the last week of May.

Until July 4, e-file utilities ITR-2 and ITR-3—employed by taxpayers with capital gains, multiple sources of income, or with business income—were not operational.

This lag is shortening the filing due date window and pushing more returns into the September 15 deadline, which was extended from the normal July 31.

Verification Bottlenecks

It has adopted a more stringent verification policy to avoid fraudulent refunds by the Income Tax Department.

Refund is being withheld pending examination of earlier assessments and earlier ITRs.

If there are reviews in progress or outstanding reviews for past years, refunds are retained automatically.

Transparency Issues

The department has stopped providing real-time data on processed ITRs, depriving one of the key indicator of backend activity.

Refund dates are left uncertain for taxpayers, and that causes unease and speculation.

Experts are urging the department to improve communication and provide status updates in order to prevent confusion.

What you should do

File and e-verify returns as soon as the accompanying forms are released so that they are not delayed further.

Ensure all disclosures are current and check for any outstanding notices of assessment for previous years.

Check the e-filing portal periodically for updates and processing status.

Takeaway Trends

Honest taxpayers may face delays despite timely and accurate filings. The refund delay is only part of a wider compliance push—but it's also trying patience.

Early filing, spotless records, and vigilance remain the best defense against refund limbo.

Sources: MSN India, Financial Express, Business Today, Outlook Money, WION News, Income Tax Department India

 

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