Income Tax Refund Delays for AY 2025-26: Why Taxpayers Are Still Waiting and What You Can Do

Kolkata, January 9: Many taxpayers across India are facing delays in receiving their income tax refunds for Assessment Year (AY) 2025-26, corresponding to Financial Year (FY) 2024-25. Although the Income Tax Department has substantially reduced average refund processing timelines over the past decade, a mix of technical issues, data mismatches, and enhanced verification measures has led to a backlog this year.

Data Mismatches Emerging as a Key Reason

One of the primary causes behind delayed refunds is inconsistency between details filed in the Income Tax Return (ITR) and official tax records. Differences between income, TDS, or deduction figures mentioned in the ITR and those reflected in Form 26AS or the Annual Information Statement (AIS) often trigger system alerts. Once flagged, the return is routed for additional verification, extending the refund timeline. Income Tax Refund Status: Why Your Money is Delayed and How to Track It in 2026.

Tax experts note that even minor discrepancies, such as interest income not matching bank-reported data, can push a return out of the automated processing cycle.

Bank Validation and PAN Name Issues

Refunds that have already been processed may still fail at the credit stage due to banking-related issues. If a taxpayer’s bank account is not pre-validated on the e-filing portal, or if the name on the bank account does not exactly match the PAN database, the refund is automatically rejected. In such cases, the status typically shows as “Refund Failed,” requiring corrective action from the taxpayer. Income Tax e Filing Delays Explained: How Much Interest Taxpayers Pay for Missing Deadlines and What the Government Owes on Late Refunds.

Increased Scrutiny for AY 2025-26

For this assessment year, the department has rolled out more robust automated risk checks. Returns involving high-value deductions, exemptions, or complex transactions are being subjected to deeper scrutiny. While this improves accuracy and reduces fraudulent claims, it also means that some genuine refunds are taking longer due to manual review by the Centralised Processing Centre (CPC).

How Taxpayers Can Check and Resolve Refund Delays

Taxpayers awaiting refunds should regularly monitor their ITR status on the official e-filing portal. If the refund status indicates failure, updating bank details and raising a “Refund Re-issue” request is essential. Ensuring that the bank account is Aadhaar-linked and the registered mobile number is active can also help avoid further delays.

If the status continues to show “Under Processing” for an unusually long period, taxpayers have the option to raise a formal grievance through the e-Nivaran system on the portal.

Step-by-Step Guide to Filing an e-Nivaran Grievance

Taxpayers can alert the department about prolonged refund delays by submitting an online grievance:

• Log in to the Income Tax e-Filing portal using PAN or Aadhaar credentials.
• Navigate to the ‘Grievances’ section and click on ‘Submit Grievance’.
• Select ‘CPC-ITR’ as the department, as it handles refund processing.
• Choose ‘Refund’ under the grievance category and select the appropriate sub-category.
• Mention Assessment Year 2025-26 and describe the issue clearly. Supporting documents such as ITR-V or bank proof can be uploaded in PDF format.
• Submit the grievance and note the Grievance ID to track the status online.

Over the years, the Income Tax Department has modernised its systems, reducing average refund processing time from nearly 93 days a decade ago to just a few weeks in most cases. However, for FY 2024-25, a surge in return filings combined with advanced risk-management tools has resulted in longer wait times for some taxpayers.

Chartered accountants advise filing returns early, carefully reconciling income and deduction details with AIS and Form 26AS, and ensuring bank details are accurate to minimise the risk of refund delays.

(The above story first appeared on LatestLY on Jan 09, 2026 12:33 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).