Income Tax Refund Stuck? Types of Notices Issued by the Department and How to Reply
Income tax refunds for the 2024-25 financial year (Assessment Year 2025-26) are taking longer than usual, leaving millions of taxpayers waiting for their money. While simple returns are normally processed within weeks, refunds above INR 30,000 are facing delays due to stricter verification, data mismatches and enhanced risk-based scrutiny by the Income Tax Department.
New Delhi, January 18: Income tax refunds for the 2024-25 financial year (Assessment Year 2025-26) are taking longer than usual, leaving millions of taxpayers waiting for their money. While simple returns are normally processed within weeks, refunds above INR 30,000 are facing delays due to stricter verification, data mismatches and enhanced risk-based scrutiny by the Income Tax Department.
Why Income Tax Refunds Are Delayed
The main reason behind the slowdown is the department’s increased reliance on automated data analytics. Income declared in returns is being matched closely with Form 26AS and the Annual Information Statement (AIS). Even small differences in bank interest, dividend income or capital gains can put refunds on hold.
Returns claiming higher deductions that were not disclosed earlier to employers through Form 12BB are also being flagged for manual checks to curb false claims. ITR Refund Delay: Why Income Tax Refunds Are Late and What Taxpayers Should Do.
Common Income Tax Notices You May Receive
If your refund is delayed, you may receive one of the following notices. Understanding them is key to quick resolution:
Section 143(1) Intimation
This is a routine communication after return processing. It shows whether your tax calculation matches the department’s records. If there is a demand, you must pay it or file a rectification request.
Section 139(9) Defective Return Notice
Issued when there are errors such as missing schedules or incorrect details. You usually get 15 days to correct the defect on the income tax e-filing portal.
Section 245 Adjustment Notice
This informs you that your current refund is being adjusted against an outstanding tax demand from a previous year. You can agree or disagree online.
Section 143(2) Scrutiny Notice
This means your return has been selected for detailed scrutiny. You must submit documents supporting your income and deductions.
Steps to Speed Up Your Income Tax Refund
Taxpayers should log in to the e-filing portal and check the Refund or Demand Status. If it shows refund failure, the issue is often due to an unvalidated bank account or incorrect IFSC code. Revalidate your bank details and submit a refund reissue request. Income Tax Refund Delays: Know the Reasons of Delay, Interest Rules and How To Check Status.
Also keep an eye on emails and SMS messages for Nudge alerts from the department. These alerts highlight mismatches and allow you to file a revised return voluntarily. Responding early can significantly reduce refund delays.
Timelines and Interest on Delayed Refunds
As per the Income Tax Act, the Centralised Processing Centre has time until December 31, 2026, to process returns for this assessment year. If the delay is not caused by the taxpayer, the department pays interest at 0.5 percent per month or 6 percent annually on the refund amount.
To avoid technical issues, ensure your PAN is linked with Aadhaar and your bank account is pre-validated on the portal. Taking these steps can help ensure your income tax refund is processed without unnecessary delays.
(The above story first appeared on LatestLY on Jan 18, 2026 05:58 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).