As the year draws to a close, many taxpayers are experiencing delays in receiving their income tax refunds, prompting concerns and confusion. The Income Tax Department has been sending out alerts regarding potential mismatches in filed returns, leading to a hold on refund processing for many. These alerts, often delivered via email and SMS, have left taxpayers uncertain about the reasons for the delays and the necessary steps to resolve them.
Several factors contribute to these delays. Heightened verification checks are a primary cause, with returns involving foreign income, capital gains, or multiple income sources undergoing more thorough scrutiny. Refunds exceeding ₹1,00,000 are also subject to additional checks, extending the processing time. The department's focus is on preventing fraudulent claims and identifying mismatched incomes reported from different sources.
Data mismatches and errors also play a significant role. If the amounts declared in the income tax return do not align with Form 26AS, the Annual Information Statement (AIS), or tax credits claimed by employers or banks, the refund process can be stalled until the discrepancies are resolved. Technical bottlenecks within the processing system can further contribute to the delays.
The Income Tax Department is using a computer system to cross-check the income and details mentioned in tax returns with information received from other sources, such as employers, banks, and financial institutions. Discrepancies between reported information and records like Form 16, Form 26AS, and the AIS can trigger a temporary hold on refunds.
The department has also launched a "Nudge" campaign, urging taxpayers to file updated tax returns if their exemptions, deductions, and refund claims are found to be ineligible. This campaign reflects a greater vigilance on tax deductions and exemptions claimed by taxpayers.
The deadline for filing a revised Income Tax Return (ITR) is December 31, 2025. Taxpayers who have made errors or omissions in their original filings must revise their returns by this date to avoid potential delays in receiving their refunds. Failure to do so may result in disallowed deductions, additional tax liabilities, interest, and penalties.
Taxpayers receiving alerts from the Income Tax Department should carefully verify the information in their returns against Form 16, Form 26AS, and the AIS. If discrepancies are found, filing a revised return under section 139(5) before the December 31 deadline is crucial. In some cases, the department may only require an online clarification through the e-filing portal.
While the December 31 deadline is significant, it is important to note that refunds do not lapse if returns remain unprocessed after this date. The Income Tax Department has several more months to process returns, and refunds can be issued well after the calendar year ends. In cases where the delay is attributable to the department, interest is payable on the refund amount for the period of delay.
Despite the possibility of delays, taxpayers can take proactive steps to ensure a smoother refund process. Accurate filing, timely e-verification, and validated bank details remain essential. Keeping records of investments and deduction claims handy can also be beneficial if the department seeks further clarification.
