What to Do if Your Income Tax Refund is Delayed in India?(FY 24-25)

For many taxpayers in India, filing an Income Tax Return (ITR) is a necessary annual ritual. But let’s face it: one of the most anticipated outcomes of that filing is the income tax refund, especially when excess tax has been deducted at source (TDS) or paid through advance tax.

So, what happens when that expected refund is delayed? You know that you have done your part by filing the return, verifying it, and waiting patiently. But the refund hasn’t arrived. Is there something wrong? Can you escalate it? Are you entitled to interest? Will it still come?

In this blog, we explain:

• Common reasons for refund delays
• How to check your refund status
• What steps to take if your refund is delayed
• What the law says about interest on delayed refunds
• When and how to file a grievance or request condonation

What is the Income Tax Refund?

A refund arises when the total tax paid by you through TDS, advance tax, or self-assessment tax exceeds your actual tax liability.

Once you file your Income Tax Return, and it is processed by the Centralized Processing Centre (CPC), the refund (if due) is either:

• Credited directly to your bank account (linked to PAN and validated)
• Held back due to a mismatch, verification issues, or scrutiny

When your return is processed, you will receive an intimation under Section 143(1) of the Income Tax Act, 1961, indicating whether a refund is issued or not.

What is the Timeline for Income Tax Refunds?

According to the Income Tax Department:

• Refunds are generally processed within 20 to 45 days from ITR verification.
• If your return is filed early (e.g., June or July), refunds may be processed faster.
• For ITRs filed closer to the due date (now September 15, 2025), processing may take longer due to high volume.

However, some cases may take up to 90 days or more, especially if there are issues like:

• Discrepancies in income
• Errors in bank account details
• TDS mismatch
• Scrutiny selection

Reasons Why Your Refund May Be Delayed?

Here are the most common causes for which your Income Tax Refund could be delayed in AY 2025–26:

1. Return Not Yet Processed: Your ITR may still be under processing at CPC. This is common during the peak months, i.e., from August to October.
2. Return Not Verified: After filing, you must e-verify your return within 30 days. If you have not, your return will not be considered valid.
3. Bank Account Not Pre-validated: Refunds are only issued to pre-validated bank accounts. If your bank account is not linked to your PAN or has failed validation, the refund cannot be processed.
4. TDS or Income Mismatch: If there is a mismatch between your ITR and the AIS/Form 26AS, such as unreported income or incorrect TDS, your return may be flagged for review.
5. Rejection by the Income Tax Department: If the Income Tax Department finds any discrepancy in comparing the tax liability and the calculation of your tax return, they may hold your refund.  In the case that your return is correct, you can file a rectification with the Income Tax Department under Section 139(4) of the Income Tax Act, 1961.
6. Return under Scrutiny: If your return is selected for detailed scrutiny or verification, the refund will be withheld until the process is complete.

How to Check Your ITR Refund Status?

You can check the refund status in two ways:

a) Through the Income Tax Portal

1. Go to: https://www.incometax.gov.in
2. Log in using your PAN
3. Navigate to:

1. • ‘e-File’ > ‘Income Tax Returns’ > ‘View Filed Returns’
   • Select the relevant AY (2025–26)

1. Check the status (e.g., “Processed with refund”, “Under Processing”, “Refund issued”, etc.)
2. Click on “Refund Re-issue”, then go to the “Create Refund Reissue Request” and fill in the necessary details.
3. e-Verify the details and submit the refund re-issue request.

b) Through the TIN NSDL Website

1. Visit https://tin.tin.nsdl.com/oltas/refund-status-pan.html
2. Enter PAN and assessment year
3. View refund status directly

What the Law Says About Delayed Refunds?

Under Section 244A of the Income Tax Act, 1961, you are entitled to interest on delayed refunds.

Interest Rules:

• 0.5% per month (or 6% per annum) on the refund amount
• Interest is calculated from April 1 of the assessment year to the date of refund, if the return was filed before the due date
• If filed after the due date, interest is paid from the date of return filing to the refund date
• No interest is payable if the refund is less than ₹100

CBDT circulars in recent years confirm that delays beyond the statutory time frame, not attributable to the taxpayer, must include interest under Section 244A.

Steps to Take if Your Refund Is Delayed

If your refund has not arrived within 60 days of filing and verification, here’s what you should do:

Step 1: Check ITR Processing Status

• Login to the portal and verify whether your return is marked “Processed” or “Under Processing”.
• If still under processing, wait at least 90 days before escalating.

Step 2: Verify Your Bank Account

• Ensure your refund bank account is pre-validated on the income tax portal.
• If not, go to:
  • Profile > My Bank Account
  • Add a valid bank account and validate it through net banking or the penny-drop method

Step 3: Compare AIS and Form 26AS

• Download AIS (Annual Information Statement) and Form 26AS from the portal
• Check for any discrepancies or missing TDS entries
• File a correction or rectification request if necessary

Step 4: Submit Grievance on the IT Portal

If everything appears correct and your refund is still pending:

• Go to the ‘e-Nivaran’ section on the IT portal
• Submit a grievance for a delayed refund
• Mention your acknowledgment number, assessment year, and confirmation of return verification

The IT Department generally responds within 15 working days.

What If You Filed Late? Are You Still Eligible for a Refund?

Yes,  as long as you file your return before December 31, 2025, you can still claim your refund.

However, if you missed even that, you may file an Updated Return (ITR-U) under Section 139(8A). Refunds are not processed against ITR-U returns unless you apply for condonation of delay.

Filing for Refund Condonation (If Return Was Filed Late or Not at All)

If you missed the deadline for claiming a refund, you can submit a condonation request under Section 119(2)(b).

How It Works:

• File a manual application to the Principal Commissioner of Income Tax (PCIT)
• Explain the reasons for delay (health issues, system failures, genuine hardship)
• Attach ITR copy, Form 26AS, TDS certificates, and proof of excess tax paid
• If accepted, your refund will be processed even though the deadline has passed

As per CBDT Circular 11/2024, authorities may accept such applications up to six years from the end of the relevant assessment year, for refund amounts not exceeding ₹1 crore.

Final Tips for Faster Refunds

• File early, preferably before the due date
• Double-check TDS, salary, and interest income in Form 26AS and AIS
• E-verify your ITR within 30 days of submission
• Ensure your bank account is pre-validated and active
• Respond promptly to any notices or requests from the Income Tax Department

Conclusion

A delayed income tax refund can be frustrating. But understanding the process, knowing your legal rights, and following up with the right tools can make all the difference. To ensure your refund reaches you promptly, consider checking your processing status, verifying your bank account, or submitting a grievance. Taking proactive steps is the best way to minimize unnecessary delays.

And if you have missed the window, don’t hesitate to file a condonation request; many taxpayers have successfully recovered refunds this way.