Income tax refund delay 2025: Expected timeline to department checks, what we know so far

Income tax refunds have been taking longer than usual this year, sparking concern among taxpayers across India. Searches for “income tax refund” even started trending on Google after CBDT Chairman Ravi Agrawal mentioned that several large-value cases are under scrutiny, which could be contributing to the delays.

On Reddit, one user reported filing their ITR-1 on July 10, 2025, but even after four months, their refund had not been processed. They noted that many others seem to be stuck in the same “Refund Pending” loop, reflecting widespread frustration.

Reasons behind income tax refund delay

CBDT Chairman Ravi Agrawal explained that the ongoing delay in issuing refunds is due to several checks initiated by the department.

1. First, a number of refund claims have been flagged as high-value, which require more detailed scrutiny before they can be cleared.

2. He added that some returns have been red-flagged for questionable deductions, triggering additional verification steps.

3. The department has also detected instances of wrongful or excessive deduction claims, which has further slowed processing as these cases are being analysed.

4. Additionally, Agrawal noted that the department has written to certain taxpayers asking them to file revised returns if they had missed or incorrectly reported information, saying, “We have also written to the taxpayers to file a revised return in case they have forgotten something.”

5. "Notice for defective return under Section 154 can delay processing, and sometimes a new income tax return (ITR) needs to be filed," said Mumbai-based income tax expert Balwant Jain.

6. "Government liquidity issues can occasionally contribute to delays in large-scale refund disbursements," added Jain.

7. Issues with e‑verification

8. Bank‑account linking or PAN–Aadhaar linkage

When will you receive your refund?

"Low-value refunds are being released. We have analysed and found that some wrong refunds or deductions were being claimed. So, this is a continuous process. We hope to release the remaining refunds by this month or by December," Agrawal told reporters after he inaugurated a taxpayers' lounge at the ongoing India International Trade Fair (IITF).

What you should know/check as a taxpayer

If your refund is delayed, it could be due to any of the following:

• Large refund amount (flagged for scrutiny)

• Suspicious or excessive deduction claims

• Errors or mismatches between your ITR and official statements (like Form 26AS)

• Issues with e‑verification, bank‑account linking or PAN–Aadhaar linkage

• The return is under manual review or awaiting a revised return

Real-time refund tracking dashboard: Proposed solutions for the future

The dashboard would display clear status indicators and estimated timelines for refund credit.

A ‘Raise Concern’ or ‘Escalate’ button could reduce manual follow-ups and improve the taxpayer experience, aligning India’s tax system with global best practices.