Income Tax Refunds Delayed in 2025 Due to Red-Flagged Claims, Says CBDT Chairman
High-value and suspicious refund claims are causing 2025 Income Tax refund delays, the CBDT chairman has said
Income Tax
Income Tax
Many taxpayers in India are experiencing delays in receiving their Income Tax Refunds for 2025. The Chairman of the Central Board of Direct Taxes ( CBDT ), Ravi Agrawal, has explained why this is happening and what taxpayers can expect next.
Why Refunds Are Getting Delayed
According to the Financial Express, the Income Tax Department is taking extra time to review certain refund claims that appear unusual. These include:
High-value refund claims
- Red-flagged claims where certain deductions or details seem incorrect or need verification
- Because these claims need detailed checking, refunds for such cases are being processed slowly.
Low-Value Refunds Already Released
The CBDT chief said that most low-value refunds have already been paid. He explained that the department found several cases where taxpayers had claimed incorrect deductions or wrong refunds. Due to this, the system is being more careful while processing refunds this year.
The department aims to complete all genuine refund payments by December 2025.
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Revised Returns May Be Needed
Some taxpayers have received messages from the Income Tax Department asking them to file revised returns. This happens when the system detects missing information or errors in the original return. Filing a corrected return can help speed up the refund process.
Refund Numbers Lower this Year
Refunds issued this year have dropped compared to last year. One reason is increased scrutiny of suspicious claims. Another reason is that fewer people have claimed refunds after changes in TDS rates.
Efforts to Reduce Pending Tax Appeals
The CBDT chairman also said that the government is working to reduce the backlog of tax appeals. Appellate authorities are clearing pending cases faster, with a much higher number of appeals disposed of this year compared to last year.
Other Reasons Why Refunds Are Delayed
Data Mismatches and Bank Detail Issues
Some of the common underlying causes include:
- A mismatch between what you have claimed in your return and what appears in official records such as Form 26AS or the Annual Information Statement (AIS).
- Incorrect or un-validated bank account details such as wrong IFSC, closed account, or name mismatch.
- PAN-Aadhaar linkage or mismatch problems.
These may not always be major errors, but the Income Tax Department often flags these cases for extra verification, which slows down refunds.
Technical / Operational Delays & Filing Constraints
This year, the ITR filing utilities for some forms were released later than usual, which delayed return filing and automatically pushed back refund processing. A huge number of returns filed close to the deadline can slow down the system.
Some taxpayers with simple returns are receiving refunds in as little as 17 days or 24 hours but many others with mismatches or special claims are facing longer delays.
Adjustment of Refunds Against Previous Demands
If you have any outstanding tax dues, earlier year notices, or pending demands, your refund may either be:
- Adjusted (partially or fully) against those dues, or
- Delayed until the system finishes the adjustment process.
Your Ultimate Guide to India’s Latest Income Tax Laws, Click Here
What Taxpayers Should Know / What You Can Do
- Check your refund status: Log in to the e-filing portal, go to “View Filed Returns” or “Refund/Demand Status” for the relevant Assessment Year.
- Verify bank account details: Make sure the bank account you provided is current, correct, pre-validated and matches your PAN details.
- Cross-check your income and deductions: Before filing, check your Form 26AS/AIS for TDS/TCS, interest income, other incomes. If there’s a mismatch, consider rectifying it.
- Respond promptly to any notices: If the department reaches out (via email/sms or physical), reply or upload documents on time, it speeds up processing.
- Be aware of interest: Under Section 244A of the Income‑tax Act, 1961, if your refund is delayed beyond the stipulated time, you are generally eligible for interest on the refunded amount.
- Don’t panic if delay happens: Many refunds get delayed purely because they are under extra verification. If you’ve filed and verified your ITR correctly, the refund should arrive eventually.
Refunds have grown massively over the past decade from around Rs. 83,000 crore in 2013-14 to about Rs. 4.76 lakh crore in 2024-25. The tax department’s average refund processing time (for simpler cases) is much faster than earlier, due to automation and e-filing improvements. However, “special cases” (large claims, flagged returns) still face delays.
To put it simply, if your refund is small and your return was clean (income, deductions, bank details all straightforward), you may receive it soon. But if your refund is large, you claimed unusual deductions or your information needed verification, your refund may take longer due to extra scrutiny
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