CBDT Reveals Reasons for Income Tax Refund Delays and Expected Payout Timeline

Many taxpayers across the country are still waiting for their income tax refunds this year. The CBDT said that most genuine refunds should be cleared by the end of November or December 2025. Chairman Ravi Agrawal added that the department is now completing checks on high-value and system-flagged refund claims.

Why Income Tax Refunds Are Delayed

• Review of Large Refund Requests: According to CBDT Chairman Ravi Agrawal, high-value refund claims are undergoing a detailed review before approval.
• System Alerts on Doubtful Deductions: The automatic checks have flagged certain deduction claims as suspicious, requiring further verification.
• Detection of Inflated or Wrong Claims: The authorities identified cases where deductions were overstated or incorrect, slowing down refund approvals.
• Need for Corrected Tax Filings: Taxpayers who missed or misreported details have been asked to submit revised returns.
• Lower Refund Outflow This Year:
  A decline in refund numbers—partly due to fewer claims and rationalised TDS—has impacted issuance levels.
• Enhanced checking for High-Value Refunds:
  The refunds exceeding ₹1 lakh are subject to additional layers of examination.
• Complications in Returns with Multiple Income Sources:
  Filings involving foreign income, capital gains, or varied income streams often require manual assessment.
• Unverified Returns Causing Hold-Ups:
  If the taxpayer has not verified the tax return, the refunds remain pending.
• Discrepancies in Reported Tax Credits:
  Mismatches between taxpayer claims and data in Form 26AS or AIS result in further checks.

Official Data

Between April 1 and November 10, refunds dropped by nearly 18%, totalling over ₹2.42 lakh crore. The delay also coincided with the extended ITR filing deadline for FY 2024–25, which was moved from July 31 to September 16, 2025, due to changes in forms and system updates.

Conclusion

While refund delays have caused widespread concern, the CBDT has assured taxpayers that most pending legitimate refunds—particularly those not flagged for discrepancies—should be released by November-end or December. Taxpayers who received notices to revise their returns are encouraged to act promptly to avoid further delays. As the department clears backlogs and completes scrutiny of high-value cases, refund processing is expected to accelerate in the coming weeks.