Still Waiting For Your ITR Refund? Tax Dept Might Cut It To Clear Your Old Dues

New Delhi: For many taxpayers across India, the wait for income tax refunds has been unusually long this year. According to the Income Tax Department’s website, nearly 1.23 crore income tax returns (ITRs) are still pending for processing, out of the 3.98 crore returns filed so far. While 2.74 crore ITRs have already been cleared as of August 31, lakhs of taxpayers are yet to see refunds credited to their accounts. With the extended deadline for filing ITRs now set at September 15, 2025, for those not requiring an audit, the pressure is building as only two weeks remain. But for those who have already filed, the bigger question is: why is the refund process so slow?

One key reason lies in adjustments for past tax arrears

If a taxpayer has outstanding dues from earlier years or pending appeals, the department may offset the refund against those arrears, delaying or reducing the payout. Similarly, large or suspicious refund claims trigger deeper scrutiny. In such cases, taxpayers are often asked to submit additional documents, which naturally prolongs the process.

Another factor is the seasonal backlog

The peak filing season creates a flood of cases for the department, and despite automation, manual checks in sensitive cases lead to bottlenecks. Adding to this are technical glitches, with many taxpayers complaining that their AIS (Annual Information Statement) and Form 26AS data don’t match, leaving refunds stuck.

The late release of ITR forms also played a role

While ITR-1 and ITR-4 were available in May, ITR-2 and ITR-3 came only in July, delaying filings and, in turn, refunds. Issues with **bank account validation—such as incorrect account numbers, inactive accounts, or incomplete pre-validation on the portal—have further stalled payouts.

Another common mistake is failure to e-verify returns

Without Aadhaar OTP verification, net banking confirmation, or sending ITR-V to CPC Bengaluru, the return remains incomplete, and the refund cannot be processed. Finally, discrepancies between declared income and AIS/Form 26AS data often put refunds on hold until the department finishes its checks.

The government is aware of these delays

Finance Minister Nirmala Sitharaman has urged tax officials to speed up refunds and restore taxpayer confidence. The deadline for processing older returns (AY 2023–24) has also been extended to November 30, 2025, raising hopes for quicker resolutions. But for now, taxpayers must remain patient—and double-check their filings—to avoid unnecessary refund roadblocks.