Why your income tax refund might be delayed: Top 5 reasons explained

If you have been scrolling through social media, you have probably seen posts like Vineeth K’s on X, taxpayers sharing their frustration over delayed income tax ( I-T) refunds.

The conversation on social media platform X highlights a wide range of experiences: some taxpayers have received their refunds, while others are still waiting months after filing. Contributors mention factors such as high CTC, foreign investments, advanced tax payments, and losses on other items, all of which can affect refund timelines.

Why your income tax refund might be delayed

There could be several reasons why your income tax refund might be taking longer than expected.

1. Refunds above ₹1 lakh often undergo additional scrutiny and verification, slowing down the process.

2. Returns with complex components like foreign income, capital gains, or multiple income sources often require manual verification, extending the processing time.

3. "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.

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

5. Filing a revised return can push back the timeline since the system needs to reprocess the new data.

Mumbai-based tax expert notes that ITR-1 (Sahaj) returns, being simpler, are usually processed faster.

Check your ITR status at the Income Tax e-Filing Portal and ensure there are no pending communications from the Income Tax Department, as these can also cause delays.

Other reasons for income tax refund delay

• If you don’t verify, your return becomes invalid, and your refund won’t be processed.

• Refunds can also be delayed if the tax credit in your return doesn’t match your Form 26AS or Annual Information Statement. If this happens, the department may hold your refund until you resolve the mismatch by raising a grievance with the CPC.

• Any discrepancy, even the slightest mismatch, between the amount declared in the return by the taxpayer and the amount reported by employers, banks, or financial institutions may raise a suspicion warranting further examination

ITR filing: Belated return deadline

The initial extension to September 15 was necessary due to significant changes in the ITR forms for the year. A subsequent final, one-day extension was granted on September 15 to accommodate taxpayers who faced portal glitches during the filing process.