Why Income-Tax Refunds Are Getting Delayed & How You Can Track or Expedite Them (Post-2025)

With the 2025 ITR season underway, many taxpayers who filed their returns on time are experiencing unusually long delays in receiving refunds. The reasons are multiple — ranging from technical upgrades, stricter scrutiny, data mismatches — and understanding them can help you take prompt remedial action.

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1. What Is an Income-Tax Refund — and What Is the Usual Timeline

• A refund arises when the total tax paid (via TDS, TCS or advance tax) exceeds the actual tax liability calculated in your ITR.

• Online procedure: once you file and e-verify your ITR, the refund processing begins. Under “normal” conditions, the refund is typically credited within 4–5 weeks after e-verification.

• Earlier, many taxpayers — especially those with simple income profiles (salary + small interest / house property income) — could expect refund within this timeframe.

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2. Why Refunds Are Getting Delayed in 2025: Key Reasons

Recently, a significant number of refunds have been delayed. The main causes are:

🔹 Stricter Verification & Increased Scrutiny

• The Central Board of Direct Taxes (CBDT) has stated that many refunds — especially “high-value” or refunds involving substantial tax deductions/exemptions — are being flagged for additional scrutiny.

• If your ITR involves large deductions or unusual claims, the department may require detailed verification before approving refund.

🔹 Mismatch between ITR Data, AIS / 26AS / Bank Details

• Refund delays often result from mismatches between your return data, bank account details, Form 26AS / AIS or other records.

• Inaccurate or invalid bank information (incorrect account number, IFSC, name mismatch, inoperative account) is a frequent cause of refund rejection/delay.

🔹 High Volume of Returns, System Upgrades / Portal Bottlenecks

• The influx of last-minute ITR filings, combined with backend system upgrades, has resulted in processing delays at the central processing centre.

• For 2025, several “red-flagging” algorithms have been updated — raising scrutiny thresholds. As a result, even moderately complex returns may take longer than usual.

🔹 Defective or Incorrect ITR Returns, Delay in E-Verification, or Non-compliance

• If return is filed but not e-verified within prescribed time, processing (and thus refund) does not begin.

• Incorrect claims (deductions, losses), insufficient documentation or missing disclosures can trigger intimation under Section 143(1)(a), initiating review and delay.

🔹 “Red-Flagged” Refunds — High Value or Suspicious Deductions

• CBDT has explicitly stated that refunds involving large deductions or unusual patterns are being held for deeper review before payout.

• Hence, salaried individuals with straightforward incomes are more likely to get refund sooner; whereas business owners, professionals or those claiming large exemptions or deductions may face delay.

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3. How to Track Your Refund Status: Step-by-Step (2025-Style)

If you’re waiting for refund, here’s how you can easily track it:

Tip for Indore & local taxpayers: Since many local banks and smaller branches may have delays in crediting refunds, ensure your bank details (account number, IFSC, PAN linkage) are up-to-date and your bank is ready to receive RTGS/NEFT credit.

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4. If Refund Is Delayed — What You Can Do to Expedite / Resolve Issues

If refund is pending beyond usual timeframe (4–5 weeks), consider:

• Verify ITR & Bank Details: Confirm that ITR was e-verified and bank account details are correct / functional.

• Check for Notices / Intimations: Look for any communication under Section 143(1)(a) or other department correspondence — respond timely.

• Raise a Refund-Reissue Request: If refund was processed but not credited (due to wrong bank details or cheque issues), you can request re-issue via the portal.

• Use Grievance / Helpline Portal: The official income-tax grievance system / helpline (Aaykar Sampark Kendra) can be approached if refund is unduly delayed.

• Ensure Documentation: Maintain complete records — Form 26AS, AIS, bank statements, proof of deductions — so that if the department requests, you can furnish them quickly.

• Avoid Aggressive Claiming Without Proper Back-up: Excessive or high deductions without proper documentation may trigger red-flags and delays.

Also, keep track of announcements from National Payments Corporation of India (NPCI) — new tools (like real-time PAN–bank linking) may help expedite refunds.

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5. What This Means for FY 2025–26 and Beyond (From a CA’s / Tax Advisor’s Perspective)

• The era of easy, quick refunds — especially for medium / high-value refunds — is over. The department’s scrutiny and compliance checks have increased significantly.

• For your clients (salaried, professionals, traders) in and around Indore / MP, it is more important than ever to ensure clean filing, accurate documentation, and bank-account linkage to avoid refund delays.

• As a CA / tax advisor firm, proactively educate clients about these delays, guide them through correct ITR filing, correct deduction claims, timely e-verification — and maintain proper contact information to avoid refund rejections.

• Use tracking tools diligently; for clients with delayed refunds, assist them with re-issue requests or grievance filings.

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Conclusion

In 2025, the landscape for income-tax refunds has shifted. With stricter compliance, enhanced scrutiny, and upgraded backend systems, delays have become common even for routine refunds.

But for a well-prepared taxpayer (or with the guidance of a diligent CA), these delays can be managed — or even largely avoided — through accurate filing, prompt verification, correct bank details, and proactive follow-up.

For your clients in Indore and beyond, advising them early on these aspects will not only ensure compliance, but also build trust, credibility, and financial discipline.