Income tax refunds for Assessment Year 2025-26 are facing widespread delays across India, affecting millions of taxpayers in early 2026. Many who filed ITRs expecting quick credits are still waiting due to enhanced verifications and backend issues.
This article breaks down the latest news, common causes, and actionable steps to resolve income tax department refund delay.
Latest News on Delays
As of January 6, 2026, around 61 lakh ITRs for AY 2025-26 remain unprocessed, with the department legally allowed until December 31, 2026, under Section 143(1). Recent reports highlight stricter data-matching with Form 26AS, AIS, and TIS, plus a new “nudge” system that pauses refunds for discrepancies until taxpayers correct them. Complaints are piling up, with refund outgo declining in recent datasets, linked to heightened scrutiny on high-value claims and foreign income.
Experts note operational slowdowns from late ITR utility releases and peak filing volumes, pushing average processing beyond the usual 20-45 days post-verification. Salaried filers with simple returns see faster processing, while complex cases face extended reviews.
Top Reasons for Refund Delays
Several factors contribute to income tax department refund delay in 2026. Key issues include:
- Data Mismatches: Income, TDS, or deductions not aligning with Form 26AS, AIS, or TIS triggers holds and notices.
- Unverified or Incorrect Bank Details: Non-pre-validated accounts, wrong IFSC, or PAN-Aadhaar linkage problems prevent crediting.
- Pending ITR Verification: Refunds start only after e-verification via Aadhaar OTP or net banking.
- Ineligible Claims and Scrutiny: Doubtful deductions, high-value transactions, or risk flags lead to manual checks.
- Backend and Systemic Delays: CPC overload during peaks and new compliance protocols slow things down.
Taxpayers often receive intimation emails instead of refunds, requiring quick responses to resume processing.
How to Check Refund Status
Track your income tax department refund delay easily using official portals. Steps for the e-Filing portal include logging in with PAN, viewing ‘My Account’ > ‘Refund/Demand Status’. NSDL portal needs PAN, AY (2025-26), and captcha for instant details like processing date and mode (NEFT/cheque).
Alternatively, check Form 26AS on TRACES for credit entries. Expect status updates: Processed, Sent to Bank, or Credited. If failed, revalidate bank details promptly.
Solutions to Speed Up Your Refund
Address income tax department refund delay proactively. Respond to notices within deadlines by filing revised ITRs or clarifications online. Validate bank accounts, link PAN-Aadhaar, and ensure ITR e-verification immediately.
For persistent issues, raise grievances via the e-Filing portal’s ‘Grievance’ section. Track high-value or complex returns closely, as they undergo extra scrutiny. Most delays resolve post-correction, with refunds credited soon after.
Interest on Delayed Refunds
Good news: Delays beyond timelines earn 0.5% monthly simple interest under Section 244A on refunds over 10% of tax paid. Interest starts from payment date (TDS/advance tax) or ITR filing (later), till refund grant, excluding taxpayer-fault periods. Auto-credited with principal; no separate claim needed for eligible cases.
What Lies Ahead
Processing backlogs may persist into mid-2026, but interest compensates waits. File accurately next time, using tools like AIS previews to avoid mismatches. Stay updated via the Income Tax portal for AY 2025-26 alerts.