Why are tax refunds getting delayed for fiscal year FY24-25

5 Dec 2025 , 12:30 PM

WHY ARE TAX REFUNDS DELAYED THIS YEAR?

The last date for the filing of returns was delayed this year by around 45 days to September 15, 2025, instead of the regular July 31; due to modifications in the forms and major changes incorporated in the softwares. The last day for the filing of returns (where audit is not required) was eventually delayed by another day to September 16, 2025 due to technical glitches in the uploading software. It is now, nearly 75 days since the filing was done and tax refunds are still going at a slow pace. The chairman of CBDT had underlined some key reasons why such delays happen.

WHY ARE TAX REFUNDS DELAYED THIS TIME AROUND?

According to the CBDT chairman, there are several reasons why the refunds get delayed. Some are generic reasons, some are procedural, and are some are specific to certain years.

• Highlighting the generic issues, there are some basic checks and balances that people tend to miss out. For instance, the PAN number may have been entered wrongly. At times, the old versus new regime is applied incorrectly and the back-up documentation is missing. There are also instances wherein the amount deducted as TDS or TCS may have been wrongly entered in the advance tax column. In such cases, the returns get rejected due on technical grounds.
• Then there are technical issues. For instance, tax filers may have claimed deductions which they are not eligible or without adequate documentation. In some cases, the assessees may not have checked the details of the tax returns in the Form 26AS, which is the official document used by the CBDT. Quite often, the wrong form is used, which can also lead to rejection of the returns. Above all, a common reason is that where the audit is required, the statutory audit may not have been done.
• There are also issues that are specific to a particular year. According to the CBDT chairman, this year there were a lot of ineligible claims made. That had led to delays in returns processing. In addition, too many forms had been incomplete due to new forms introduced and had to be sent back to the persons for rectification and re-filing of returns. All these had resulted in delays in processing refunds.

Apparently, most of the small value tax refunds have already been processed. The issues are in the larger refunds, where the CBDT wants to make doubly sure that they are genuine claims and the refunds are to be paid out legitimately.

HOW CAN YOU ENSURE QUICKER REFUNDS?

There are some things that tax filers can proactively do, and there are some things that can be done subsequently. Here is a quick sampler.

• For instance, before filing returns, the assessees can ensure that the data is fully compatible with the Form 26AS so as to reduce the chances of return rejection. In case of business income, if there is a big divergence from previous year’s returns, there should be a logic to it that can be documentarily proved.
• Many tax filers still make false claims for deductions or even avoid showing certain income flows. They must remember that, today, all transactions are tracked through your PAN or Aadhar, and both are linked. Hence, it is not just essential, but also ethical, that all such sources of income are properly disclosed in the returns.
• One rule to follow is that in the event of doubt, it is best to disclose. Quite often, filers forget to make appropriate disclosures of large cash transactions or large credit card bills, or even some assets purchased. These are tracked at multiple levels through appropriate use of financial intelligence. It is a good idea to be transparent.
• Finally, maintain timelines and file returns well before the due-date to avoid last-minute rush. That way, you can avoid penalties and maintain a clean tax record in the long run. Such a clean track record will work in your favour in future disputes.

If you are still waiting for FY25-26 refund, it is expected to be released by December. The one thing you can do is to regularly log into your tax account on the website and check if there is anything pending in your Worklist or under E-Proceedings. Quite often, the discrepancy is minor in nature and a quick response will ensure speedy refunds.