Taxpayers are experiencing significant delays in receiving their income tax refunds during the fiscal year 2024–25. A sharp 38% decline in the total refunds issued has raised concerns, especially for those with high-value claims. Refunds processed until early November were ₹88,548 crore, a steep drop compared to ₹1.42 lakh crore in the same period last year. This delay has become a pressing issue for individuals and tax professionals alike, with many reporting that even basic returns are taking considerably longer to process.
Factors Behind the Refund Slowdown
The delay in refunds has been attributed to several factors, according to tax practitioners. These include late releases of Income Tax Return (ITR) forms, stricter verification rules, and bottlenecks in processing at the Centralised Processing Centre (CPC) in Bengaluru. Officials have indicated that smaller refunds are being processed faster, but large refunds are under more intensive scrutiny, contributing to slower overall processing times.
The most significant delays are observed for refunds above ₹30,000, with tax professionals noting that many of these remain unresolved. Estimates suggest that non-corporate taxpayers are experiencing the largest declines in refund amounts.
Impact of Late ITR Form Releases
One of the key reasons for the processing delays is the late release of ITR forms. While the forms were available as early as April last year, they were released much later in 2024, disrupting the filing timeline for millions of taxpayers. As a result, the compressed filing calendar has reduced the time available for processing returns that require additional checks, leading to cascading delays.
Compliance Issues Adding to the Backlog
In addition to the late form releases, compliance-related mismatches are further complicating the situation. For instance, many salaried taxpayers applied for large refunds after employers deducted excess Tax Deducted at Source (TDS) under Section 192. This happened due to late submission of investment declarations. Such discrepancies often require manual verification, which adds to the backlog.
Returns involving loss carry-forward, significant TDS refunds, or inconsistencies between the return and Form 26AS or AIS (Annual Information Statement) are undergoing more detailed scrutiny under revised risk-based selection rules.
Pressure from High Filing Volumes
The pressure on the system has been heightened by record filing volumes, with over eight crore returns filed by the end of November. As the deadline for audit returns, extended to December 10, approaches, professionals expect a further surge in filings. The late arrival of ITR forms has disrupted the entire compliance calendar, especially affecting taxpayers who were expecting refunds or filing rectifications.
Common Taxpayer Errors Delaying Refunds
Many of the delays in refunds are due to avoidable errors made by taxpayers. Common mistakes include providing incorrect or inactive bank account details, selecting the wrong ITR form, mismatched TDS/TCS data, failure to e-verify returns, or claiming ineligible deductions. These errors can lead to a hold on refunds until the issues are resolved.
Lack of Transparency and Calls for Improved Systems
Another frustration for taxpayers is the lack of transparency regarding refund processing. Tax practitioners have pointed out that the system does not provide clear information about the status of delayed refunds. The e-filing portal offers limited visibility into the reasons for delays, leaving professionals unable to give their clients a clear timeline for when refunds will be processed. Users who raise grievances on the portal often receive generic responses, prompting calls for a real-time refund tracker to provide more clarity and reduce uncertainty.
How to Check Your Refund Status
Taxpayers can check the status of their income tax refunds through the Income Tax Department’s e-filing portal. To do so, log in with your PAN and password, then navigate to e-File → Income Tax Returns → View Filed Returns. After selecting the assessment year, click View Details. The portal will display the current refund status, the approved amount, the mode of payment, and the date of credit if the refund has been processed.
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