Many taxpayers who filed their Income Tax Returns (ITR) for FY 2024-25 (AY 2025-26) are still waiting for their refunds. It's been over a month since many taxpayers filed, and the refund process seems to be slower than usual this year, causing concern among taxpayers. Several factors can contribute to delays in receiving your ITR refund. Understanding these reasons can help you identify potential issues and take corrective actions.

Common Reasons for Delayed ITR Refunds

• Verification of ITR: Failing to verify your ITR within 30 days of filing is a primary reason for delays. Verification can be done through Aadhaar OTP, net banking, or by sending a signed acknowledgment to the CPC in Bengaluru. If you do not verify your return, it becomes invalid, and your refund will not be processed.
• Incorrect Bank Details: Providing incorrect bank account details, such as the account number or IFSC code, is a frequent cause of refund failures. Bank mergers and changes in IFSC codes can also lead to refunds bouncing if your linked account cannot accept the transfer. To resolve this, update your bank details under "My Bank Details" on the income tax portal and request a refund reissue. It is important to pre-validate your bank account on the income tax portal.
• Mismatch in Information: Discrepancies between the income declared in your ITR and the information reported by employers, banks, or other financial institutions in Form 26AS or the Annual Information Statement (AIS) can trigger delays. The tax department may hold your refund until the mismatch is resolved.
• Incomplete or Inaccurate Information: Missing essential information, such as Social Security numbers of dependents, or including incorrect details can significantly delay your refund. Ensure all forms and schedules are complete and accurate. Computation errors on the tax return can also cause delays.
• ITR Selected for Scrutiny: If your ITR is selected for scrutiny by the Income Tax Department, the refund process may be delayed until the assessment is completed. The Income Tax Department selects some returns for scrutiny to ensure accuracy and compliance.
• Outstanding Tax Dues: Refunds may be withheld if you have any outstanding tax dues from previous years. The department may adjust your refund to cover these outstanding amounts.
• Not Filing Old Returns: The IRS can freeze any due refunds until you file the old return. If you owe taxes on the old return, the IRS will take that amount out of your current-year refund.
• Identity Theft: The IRS suspects identity theft. Tax identity theft cases have risen in recent years. IRS identity theft filters create a tax refund delay until taxpayers verify their identities.
• Taking Certain Tax Credits: The IRS can't release refunds with the Earned Income Credit (EITC) or Additional Child Tax Credit (ACTC) before February 15. The IRS may need additional documentation to verify eligibility for these credits.

Other Potential Delay Factors

• Filing a Paper Return: Filing a paper tax return instead of e-filing can slow down the processing time. The IRS prioritizes electronically filed returns.
• Delinquent debts: Refunds may be offset if the taxpayer owes back taxes, whether individual or business-related. Delinquent Child Support: Refunds may be reduced or offset for taxpayers who owe overdue child support. If the taxpayer has delinquent federal debts, such as unpaid student loans, the refund may be offset.
• System Updates and Checks: The Income Tax Department may implement system upgrades or enhanced security checks, which can temporarily affect refund timelines. These checks are added to make sure that fake or incorrect refund claims are not approved by mistake.

What to Do If Your Refund Is Delayed

1. Check Refund Status: Use the "Where's My Refund?" tool on the Income Tax Portal to track your refund status.
2. Verify Filing Details: Ensure that your ITR is complete, accurate, and e-verified.
3. Update Bank Details: Double-check and pre-validate your bank account information on the portal.
4. Contact the Helpline: Reach out to the Income Tax Department's support team for assistance.
5. File a Grievance: Use the grievance redressal system on the portal to report any issues with your refund.
6. Ensure you have filed all prior returns.

While waiting for your refund, remain patient and ensure you have completed all necessary steps to facilitate the process. The Income Tax Department is actively working to streamline refund processing and address delays.