Income Tax Refund Delay 2025: Millions of taxpayers across the country are still awaiting their ITR refunds. The CBDT Chairman has now explained the reasons for the delay. Let’s explore the details.
Income Tax Refund Delay 2025: Millions of taxpayers filed their income tax returns months ago, but they still haven’t received their refunds. Every morning, taxpayers are checking their bank accounts, but their refunds haven’t arrived. Why are ITR refunds so delayed? CBDT Chairman Ravi Agarwal himself has provided the answer. Let’s explore the details.
CBDT Chairman Explains These Reasons
Inaugurating the Taxpayers’ Lounge at the India International Trade Fair 2025 on Monday, CBDT Chairman Ravi Agarwal said, “In many cases, incorrect or excessive deduction claims have been made. These are being investigated. While small refunds are being issued regularly, the department is taking precautions with suspicious returns. Many taxpayers have been sent messages asking them to file revised returns.” He further stated, “We are trying to ensure that all remaining refunds are issued this month or by December.”
Interest will be charged if the refund is delayed.
Furthermore, he stated that if the refund is delayed through no fault of yours, the government will transfer the refund along with interest. Under Section 244A of the Income Tax Act, taxpayers receive simple interest at the rate of 0.5 percent per month for delayed refunds. However, there are certain conditions.
1. If the ITR is filed on time, interest will be charged from April 1, 2025.
2. If the ITR is filed late, interest will be charged from the date of filing.
3. Interest continues to accrue even during scrutiny, provided the delay is not due to you.
4. However, if the refund is less than ₹100 or is due to an overpayment of self-assessment tax, no interest will be charged.
Refunds can also be withheld due to these five reasons:
1. If the form does not match Form 26AS, AIS, or TIS, the refund is withheld. Refunds can also be withheld due to TDS credit errors, such as incorrect TAN, outdated invoices, or differences in net-gross interest.
2. Furthermore, returns with foreign income, capital gains, income from multiple sources, or high-value transactions face increased scrutiny. This often results in refund delays.
3. Refunds can also be withheld if the taxpayer’s PAN is inoperative, TDS credit is denied, e-verification is not performed, the bank account is not active, or the PAN is not linked to Aadhaar.
4. Furthermore, if e-verification is not completed within 30 days of filing the return, the return is considered invalid.
5. Refunds can also be withheld if there is any outstanding tax from the previous year.
