Why Income Tax Refunds for FY 2024-25 Are Getting Highly Delayed: Key Reasons Explained

For many taxpayers, receiving an income tax refund is an important cash-flow event. However, during FY 2024-25 (Assessment Year 2025-26), a large number of taxpayers across India are experiencing unusual and prolonged delays in receiving their income tax refunds.

If you have filed your return correctly, completed e-verification, and are still waiting, you are not alone. This year’s delays are largely systemic rather than individual errors.

In this blog, Rokadh explains the real reasons behind the delay, what it means for taxpayers, and what you can do to avoid further complications.

1. Delay in Release of ITR Forms Pushed the Entire Timeline

One of the biggest contributors to refund delays this year was the late notification of ITR forms for AY 2025-26.

Traditionally, ITR forms are released in April. However, for FY 2024-25, several forms were notified much later, pushing taxpayers to file returns closer to the deadline. This delay created a domino effect, impacting:

1. Filing timelines
2. Verification timelines
3. Centralized Processing Centre (CPC) workload
4. Refund processing schedules

As a result, refunds that are normally issued within weeks are now taking several months.

2. Massive Backlog at the Centralized Processing Centre (CPC)

The Income Tax Department processes returns through the CPC in Bengaluru. This year, CPC is handling:

1. A very high volume of returns filed near deadlines
2. Revised returns filed under compliance “nudge” campaigns
3. Updated returns filed to correct mismatches

Due to this volume, many returns are stuck at the status “Return under processing”, even after successful verification.

3. Increased Scrutiny Before Issuing Refunds

For FY 2024-25, the department has adopted stricter, risk-based checks, especially for:

1. High-value refunds
2. Sudden increases in refund claims
3. Large deductions or exemptions
4. Salary vs. AIS / 26AS mismatches

Before releasing refunds, the system now performs deeper cross-verification with:

1. Form 26AS
2. Annual Information Statement (AIS)
3. TDS returns filed by employers/banks
4. Advance tax and self-assessment tax data

If even a small mismatch is detected, the refund is put on hold until clarification or correction.

4. AIS and TDS Mismatches Are a Major Cause

One of the most common reasons for refund delays this year is data mismatch, such as:

1. Income appearing in AIS but not reported in ITR
2. TDS claimed but not reflected correctly in Form 26AS
3. Interest income reported by banks but omitted in return

In such cases, CPC may:

1. Send intimation emails
2. Hold the refund
3. Ask for a revised return or explanation

Until these issues are resolved, refunds will not be released.

5. Bank Account & Verification Issues

Refunds are also delayed when there are technical or compliance-related issues, including:

1. Bank account not pre-validated on the portal
2. Incorrect IFSC code
3. PAN not linked with Aadhaar
4. ITR not e-verified within the prescribed time

Even a minor error can lead to refund failure or prolonged processing.

6. Adjustment Against Old Tax Demands

If there is any outstanding demand from previous assessment years, the Income Tax Department may adjust your refund against it.

Many taxpayers are unaware of small pending demands, which leads to confusion when refunds are reduced or not credited at all.

7. Legal Time Limit Still Allows Delay

Under the Income Tax Act, the department has time to process returns and issue refunds up to December 2026 for FY 2024-25.

While this is legally permissible, it explains why refunds are not being prioritized urgently unless processing is completed.

What Taxpayers Should Do Now

If your refund is delayed, take the following steps:

1. Check ITR processing status on the income tax portal
2. Review AIS and Form 26AS for mismatches
3. Ensure bank account is pre-validated
4. Respond promptly to any notices or intimations
5. File a revised return if required

Early action can significantly reduce further delays or future notices.

How Rokadh Can Help You

At Rokadh, we help individuals, professionals, and businesses with:

1. Income tax return review & correction
2. AIS and TDS reconciliation
3. Handling refund delays and CPC notices
4. Filing revised and updated returns
5. Professional representation before tax authorities

If your income tax refund for FY 2024-25 is delayed and you need expert assistance, our team is here to help.

👉 For any clarification or personalised assistance, please visit our enquiry page:

https://rokadh.com/contact

Final Thoughts

Refund delays in FY 2024-25 are largely due to systemic processing issues and enhanced scrutiny, not necessarily taxpayer fault. However, ignoring mismatches or notices can lead to longer delays and possible future complications.

Professional guidance at the right time can save you money, effort, and stress.

Stay compliant. Stay informed. Trust Rokadh.