Income Tax Refund Delays Puzzle Taxpayers: What's Causing the Hold-Up?
Thousands of Indian taxpayers are experiencing unusual delays in receiving their income tax refunds for the financial year 2024-25, despite filing their Income Tax Returns (ITR) months ago. The situation has left many citizens confused and concerned about the status of their pending refunds, especially since the ITR filing deadline passed on September 16.
While many taxpayers have successfully received their refunds, a significant number continue to wait, wondering what's causing the unexpected delay in processing their claims.
Official Explanation: Why Your Tax Refund Is Delayed
The Central Board of Direct Taxes (CBDT) Chairman, Ravi Agrawal, addressed these concerns on Monday, revealing that the Income Tax Department is conducting detailed analyses of questionable deduction claims in certain cases. This intensive verification process is primarily responsible for the current delays in refund processing.
Agrawal clarified that the department is specifically examining refund claims identified as "high-value" or those that were "red-flagged" by the system due to suspicious deduction claims. He emphasized that while low-value refunds are being processed and released regularly, the department has discovered instances where incorrect refunds or deductions were being claimed by taxpayers.
"Low-value refunds are being released. We have analysed and found that some wrong refunds or deductions were being claimed. So, this is a continuous process," the CBDT Chairman stated during his announcement.
Significant Drop in Refund Numbers
The CBDT Chairman also pointed to what he described as "negative growth" in refunds, attributing this trend to the rationalization of TDS rates, which has naturally reduced the number of refund claims. Official data from last week reveals that ITR refunds have dropped by 18% to over ₹2.42 lakh crore between April 1 and November 10 of the current financial year.
In response to the situation, the income tax department has proactively reached out to taxpayers, encouraging them to file revised returns if they omitted any crucial information in their original submissions.
When Can Taxpayers Expect Their Refunds?
There's good news for those still waiting. Ravi Agrawal has assured taxpayers that they can expect their pending ITR refunds to be credited to their accounts by next month. Speaking to reporters on the sidelines of an event, he confirmed, "We hope to release the remaining refunds by this month or by December."
The income tax department typically processes straightforward, low-value tax returns without discrepancies much faster. However, returns with complex deductions or those flagged by the system undergo additional scrutiny to prevent erroneous refund disbursements.
Appellate Authorities Working Overtime
Agrawal also highlighted the department's efforts to clear pending appeals, noting that appellate authorities are working overtime to reduce the backlog. "We have taken a lot of steps and our appellate authorities are working overtime to ensure that the pendency is liquidated. During prior years...because of Covid etc., pendency got accumulated, but I may share that this year more than 40%, as compared to last year, disposal has been done in appeals," he explained.
The CBDT Chairman expressed confidence that the department would end the year with a significantly higher number of appeals disposed of compared to previous years.
How to Check Your ITR Refund Status Online
If you're waiting for your income tax refund, here's a simple step-by-step guide to check your refund status online:
Visit the official income tax e-filing portal at https://www.incometax.gov.in/iec/foportal/
Log in using your credentials and complete the authentication with the OTP sent to your registered mobile number
Navigate to the 'Refund/Demand Status' section available under the e-File menu
Select the applicable Assessment Year (AY 2025-26) from the dropdown menu
Click on 'View Details' to check the current status of your income tax refund
The portal will display whether your refund has been processed, the amount to be refunded, and the expected credit date if available. Taxpayers are advised to ensure their bank account details are correctly updated in the portal to avoid any further delays in refund processing.
