ITR Refund Delays Explained: Why Processing Is Slow and When Pending Refunds Will Be Released

A large number of taxpayers are still waiting for their Income Tax Refunds for AY 2025–26, even though they filed their returns months ago. While many refunds have already been issued, thousands of taxpayers continue to face delays without clear communication. The Income Tax Department has now clarified the reasons behind the slowdown and the expected timeline for pending payments.

Why ITR Refunds Are Delayed This Year

CBDT Chairman Ravi Agrawal said the department has intensified scrutiny of returns flagged for doubtful or unusual deduction claims. These additional verification layers have slowed down refund processing.

According to him, several refund requests were categorised as “high-value” or “red-flagged” due to inconsistencies or abnormally high deductions. These cases require manual verification before approval.

He also noted that:

• Low-value refunds are already being processed, as these typically involve straightforward claims.

• Many taxpayers claimed incorrect deductions, and the system detected anomalies in multiple cases.

• The department issued notices asking some taxpayers to revise their returns if discrepancies were found.

Refunds this year have also decreased overall due to rationalised TDS rates, leading to fewer refund claims. Government data shows refund payouts fell by 18%, with ₹2.42 lakh crore issued between April 1 and November 10.

Appeals and Pending Cases Being Fast-Tracked

Agrawal said the department has significantly accelerated the disposal of pending appeals. Over 40% more appeals have been settled this year compared to last year. The objective is to conclude the financial year with a much higher clearance rate.

When Will Your Refund Be Issued?

The Income Tax Department expects to release the remaining refunds by the end of November or early December.

Generally:

• Simple and low-value refunds are processed first.

• Returns with mismatches, high deductions, or flagged anomalies may take longer due to manual checks.

Taxpayers can expect updates as the system completes its verification cycle in the coming weeks.