CBDT Chairman Explains When Taxpayers Can Expect Their Delayed ITR Refunds

ITR Refund Delay Concerns Grow as CBDT Chairman Clarifies Expected Timeline for Taxpayers

Amid rising concerns from taxpayers across the country, the issue of ITR refund delay has become a major talking point this filing season. Many individuals who filed their Income Tax Return (ITR) for FY 2024–25 (AY 2025–26) have been left puzzled as they continue checking the income tax portal for updates but find no clear explanation for the hold-up. With a large number of taxpayers awaiting refunds, the Central Board of Direct Taxes (CBDT) has now provided clarity on the situation.

CBDT Chairman Ravi Agrawal recently addressed the growing anxiety around the ITR refund delay, confirming that the Income Tax Department is processing returns cautiously this year. He noted that several ITRs appear “unusual” or contain discrepancies that require deeper scrutiny before refunds can be issued. According to Agrawal, the department has already settled over 40% more appeals this year compared to previous cycles, indicating an increased workload and stricter verification system.

Large Refunds May Face Longer Delays Due to Error Checks and System Flags

While some taxpayers may receive their refunds earlier, Agrawal made it clear that larger refunds are more likely to get delayed. The reason? The automated system often flags returns with high refund claims to run additional accuracy checks. These checks ensure that taxpayers haven’t incorrectly claimed deductions or misreported financial information.

The department identified several common discrepancies causing ITR refund delay, including:

• Arithmetical errors in income or deduction calculations

• Incorrect claims made under various sections

• Deductions claimed after the due date

• Disallowance of expenses that don’t align with tax rules

• Non-validation of the taxpayer’s bank account

Most of the return verification process is automated, but the system tends to slow down when inconsistencies appear. As a result, large-value refunds undergo intensified scrutiny, which naturally extends the processing time.

Tax experts note that such delays are routine when data mismatches occur between Form 26AS, AIS, TDS details, and the ITR filed.

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Refunds Likely by This Month-End or December, Confirms CBDT Chief

Despite the delays, there is a positive update for taxpayers. Agrawal assured that most pending refunds will be released by the end of this month or by December, giving relief to lakhs of individuals still waiting for their payments.

Industry experts echo similar expectations.
According to Bangar, Founder of Taxbuddy.com, “Sometimes, the system flags returns with large refund claims for additional automated checks, which take time to clear. Further, refunds are issued in batches as part of the department’s internal budgeting cycle.”

This means that even when an ITR is processed, refunds may not be released immediately if the batch cycle has not reached that stage.

Such clarifications help taxpayers better understand why the ITR refund delay continues despite timely filing.

What Taxpayers Should Do If Their ITR Refund Is Delayed

Tax specialists recommend that taxpayers adopt a proactive approach when facing delays.
The first step is to regularly check the income tax portal for any alerts or notifications. Often, the portal displays reasons for delay, such as:

• Pending document submission

• Bank account validation yet to be completed

• Adjustment made against outstanding tax from previous years

• Mismatches identified during automated processing

Taxpayers may also receive a message under the ‘Worklist’ section asking them to confirm or validate certain refund details. This provides an opportunity to revise the return in case an incorrect claim was made earlier.

In case issues remain unresolved, individuals can file a grievance directly through the e-filing portal or connect with the CPC helpdesk for guidance. This structured approach ensures that taxpayers do not inadvertently overlook critical compliance requirements contributing to the ITR refund delay.

Will You Receive Interest on Delayed Refunds? Here’s What the Law Says

One of the most common questions taxpayers ask is whether a delayed refund qualifies for interest compensation.
Under Section 244A of the Income Tax Act, taxpayers are eligible for 0.5% interest per month (6% annually) on the refund amount, provided certain conditions are met.

Interest on delayed refunds depends on the nature of the taxes paid and the filing timeline:

• If the refund arises from TDS, TCS, or advance tax, and the return was filed within the due date, interest is calculated from April 1 of the assessment year until the refund is released.

• No interest is payable if the refund amount is less than 10% of the total tax liability.

Bangar explains, “If taxpayers file a return late beyond the due date, interest is calculated only from the actual date of filing. For self-assessment tax, interest begins from the later of the return filing date or the tax payment date.”

Thus, the eligibility for interest varies depending on individual situations, but the law does provide adequate compensation for genuine delays not caused by the taxpayer.

ITR Refund Delay Expected to Ease Soon as Department Speeds Up Processing

With the CBDT assuring faster clearance by the end of the month or December, taxpayers can expect relief soon. The department’s automated system, though stricter this year, is designed to ensure transparency and accuracy. As long as bank accounts are validated and filings are correct, refunds should be processed without major roadblocks.

For now, the message from authorities remains clear: The ITR refund delay may have caused temporary inconvenience, but the refunds are on their way.

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