Why Your Income Tax Refund Is Delayed in 2025 and How to Fix It
- Nimisha Panda
- 1 day ago
- 9 min read
Income tax refunds in India are facing noticeable delays in 2025 due to a mix of system updates, high filing volumes, and data mismatches across Form 26AS, AIS, and bank accounts. With several portal improvements and revised validation rules introduced this year, even small errors can trigger processing holds. The good news is that most of these issues can be resolved quickly through updated refund tools and timely compliance actions, helping taxpayers receive their refunds without unnecessary stress.
Table of Contents:
Common Reasons for Income Tax Refund Delay in 2025
In 2025, several systemic and procedural factors have contributed to refund delays for many taxpayers. One of the most common reasons is a mismatch between details entered in the Income Tax Return (ITR) and the data available in Form 26AS or the Annual Information Statement (AIS). Even minor discrepancies in reported income, TDS amounts, or bank details can trigger an automated review, holding the refund until verification is complete.
Another frequent issue is related to bank account validation. If the bank account is not pre-validated or linked correctly with the PAN, the refund cannot be credited. Many taxpayers also overlook updating their IFSC codes after bank mergers, leading to refund failures or bounced transactions.
Refunds are also delayed when there are unresolved income tax notices. When discrepancies or mismatches are found during processing, the Income Tax Department holds the refund until the taxpayer submits the required clarification or revised return. Moreover, those who filed returns close to the extended deadline of September 16, 2025, are witnessing longer wait times due to high data load on the processing systems. Lastly, incomplete e-verification remains a major cause—without verification, the return is not considered valid, and no refund is processed.
How to Fix a Delayed Income Tax Refund in 2025
Resolving refund delays requires a systematic approach. The first step is to log in to the income tax e-filing portal and check the “Refund/Demand Status.” This helps identify whether the delay is due to incorrect details, pending verification, or a technical error.
If the issue is related to incorrect or unvalidated bank details, update them immediately under the “My Bank Account” section and ensure the account is pre-validated. In cases where the return shows as “processed” but no refund is received, submit a “Refund Reissue Request.” This function allows taxpayers to correct earlier errors in bank information or account linkage.
When the delay stems from unresolved notices, taxpayers should respond promptly using the e-proceeding section. If corrections are needed, a revised return can be filed before the deadline of December 31, 2025. For unresolved cases, filing a grievance through the “Refund” category in the portal often triggers quicker attention from the Central Processing Centre (CPC). For persistent issues, contacting the CPC helpline or NSDL can help track or reinitiate the refund process.
How to Track Refund Status and Notices Online
Tracking the refund status online is simple and can be done directly through the Income Tax Department’s e-filing portal. After logging in, navigate to “View Filed Returns” and select “Refund/Demand Status.” This section displays whether the refund is processed, failed, or under review.
If the return shows “Processed with Refund,” it means the refund has been approved, but if it reads “Refund Failed,” the issue is usually related to incorrect bank details or account validation. For a processed status with no credit, checking the “Refund Reissue Request” section helps initiate corrective action.
In addition to the refund status, taxpayers should check for pending notices or demands under the “e-Proceedings” tab. Any unresolved query, mismatch, or verification requirement can hold up the refund. Verifying these areas ensures that taxpayers understand where the delay lies and what steps need to be taken next.
Common Bank-Related Issues That Cause Refund Delays
Bank-related problems continue to be one of the leading causes of refund delays. When the bank account provided in the ITR is not pre-validated with the Income Tax Department, the system automatically halts refund processing. The validation process ensures that the account belongs to the taxpayer linked with the corresponding PAN number.
Another common issue is outdated IFSC codes, especially after bank mergers or restructuring. When banks merge, old IFSC codes become invalid, leading to refund bounce-backs. In such cases, updating the new IFSC on the portal and revalidating the account is essential.
Refunds can also fail if the bank account was closed, dormant, or had transaction restrictions at the time of processing. Additionally, some taxpayers mistakenly link accounts not eligible for refunds, such as NRE or business accounts with restrictions on personal credits. Ensuring an active, individual savings account for refund processing can prevent most of these issues.
When to Escalate a Refund Delay in 2025
If a refund remains pending even after completing all verification steps, it may be time to escalate the matter. Taxpayers can first contact the CPC helpline to check the internal status of the refund. If the CPC confirms that the refund was dispatched but not received, contacting NSDL with the Refund File Dispatch (RFD) number can help trace the issue further.
In cases where standard channels fail, taxpayers can file an official grievance on the CPGRAMS portal or tag the Income Tax Department’s official social media accounts for faster resolution. For large refund amounts, it’s important to note that additional verification may take place, as the department scrutinizes such claims more carefully.
Interest on delayed refunds, under Section 244A of the Income Tax Act, 1961, may also apply in cases where the department takes longer than the standard processing time. This ensures that taxpayers are compensated for the delay once the refund is released.
Tips to Avoid Refund Delays in Future Filings
Avoiding refund delays in future years starts with early and accurate filing. Submitting ITRs well before the due date ensures faster processing and priority in refunds. Always cross-check Form 26AS, AIS, and TIS data before filing to prevent mismatches.
Ensure that the bank account used for refunds is both active and pre-validated. Keeping the IFSC code updated after any bank merger is crucial. Complete e-verification immediately after filing to activate the refund process without delay.
Maintaining clear records of TDS certificates, Form 16, and salary slips helps prevent inconsistencies that might lead to notices. Regularly updating contact details and checking portal notifications also ensures you never miss important communication related to refunds.
How TaxBuddy Helps You Resolve Refund Delays
TaxBuddy simplifies refund-related issues by providing automated tracking, real-time status updates, and expert support. The platform intelligently identifies the cause of delay—whether it’s a mismatch, pending notice, or bank validation issue—and suggests corrective steps.
For users facing notices or discrepancies, TaxBuddy’s expert-assisted plan connects them with tax professionals who handle the entire communication process with the department. The system also guides users on filing Refund Reissue Requests and bank validations, reducing manual errors and ensuring quicker resolutions.
TaxBuddy’s AI-driven platform provides transparency at every stage, ensuring that users are always aware of their refund status. Its easy interface and mobile accessibility make it a preferred choice for taxpayers who want a smooth, error-free refund experience in 2025.
Conclusion
Most refund delays in 2025 stem from preventable errors such as mismatched details, invalid bank accounts, or incomplete verifications. By proactively checking refund status, verifying accounts, and addressing notices on time, taxpayers can ensure smooth refund processing.
For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy provides flexible tax filing options to meet the needs of all types of taxpayers. Individuals confident about handling their returns can choose the self-filing plan, which comes with step-by-step guidance, real-time error detection, and automatic form validation. For those dealing with complex cases—such as multiple income sources, capital gains, or notices from the Income Tax Department—the expert-assisted plan connects users with qualified tax professionals. These experts handle everything from document review to submission and follow-up, ensuring accuracy and compliance with the latest tax laws.
Q2. Which is the best site to file ITR?
The official income tax e-filing portal (incometax.gov.in) remains the primary platform for filing returns in India. However, for individuals seeking a more seamless and guided experience, third-party platforms like TaxBuddy have emerged as popular choices. TaxBuddy simplifies the process by automating data entry from Form 16 and AIS, checking for mismatches, and ensuring that the correct ITR form is selected. It also provides AI-based recommendations to optimize deductions and ensure that the filing is error-free, reducing the risk of delays or notices.
Q3. Where to file an income tax return?
Income tax returns can be filed either through the government’s official e-filing website or via trusted private platforms. The government portal offers direct filing, but it can be complex for those unfamiliar with the process. TaxBuddy provides a simplified alternative that integrates all stages—from login to submission—into a guided interface. TaxBuddy users can upload Form 16, verify prefilled data, calculate tax liability, and submit the return directly through its secure platform, ensuring compliance with Income Tax Department requirements.
Q4. My ITR shows processed, but refund is pending. What should I do?
When the portal shows “ITR processed” but the refund hasn’t been credited, the first step is to verify your bank details on the income tax portal. Ensure that the account is active, linked with your PAN, and pre-validated. If everything is correct, submit a “Refund Reissue Request” through the e-filing portal. This feature allows you to reinitiate the refund process in case the previous attempt failed due to technical or bank-related issues. If no progress is seen after 15–20 days, consider filing a grievance or contacting the CPC helpline for assistance.
Q5. Can incorrect bank details delay my refund?
Yes. Incorrect bank account details are one of the most common reasons for refund delays. A mismatch in account numbers, IFSC codes, or the bank account holder’s name can cause the refund to bounce back. Always check that the account number and IFSC code match the latest bank details, especially if the bank has undergone a merger or branch restructuring. Pre-validating your bank account on the e-filing portal ensures that such issues are caught early, preventing unnecessary delays.
Q6. What if my bank merged recently and the IFSC changed?
Following bank mergers, old IFSC codes often become inactive, which can result in refund failures or credit rejections. To fix this, log in to the income tax portal, navigate to the “My Bank Account” section, and update the new IFSC code. Once updated, revalidate the account by clicking “Pre-validate Bank Account.” After validation, you can file a “Refund Reissue Request” to initiate the refund again. Keeping your banking details updated ensures that refunds are credited smoothly without manual intervention.
Q7. How long does it take to receive a refund after processing?
In most cases, refunds are credited within 15 to 30 days after the return is processed. However, timelines can vary based on several factors, such as system updates, volume of filings, or additional verifications by the Central Processing Centre (CPC). Refunds issued through validated bank accounts are usually faster, while those requiring manual reissue or notice clarification can take longer. If there is a significant delay beyond 30 days, checking the refund status and raising a grievance through the portal is recommended.
Q8. What if I missed e-verifying my ITR?
If e-verification is missed, the return is treated as invalid, meaning it will not be processed and no refund will be issued. To complete e-verification, log in to the portal and choose any available method such as Aadhaar OTP, net banking, bank account validation, or digital signature certificate (DSC). Once verified, the return status will change to “Successfully e-verified,” enabling the refund process to begin. E-verification should ideally be completed within 30 days of filing to avoid delays or rejection of the return.
Q9. What happens if there’s a mismatch in Form 26AS or AIS data?
A mismatch between the details in Form 26AS, AIS, and the ITR can lead to discrepancies in reported income or TDS credits. This may trigger a system review or even a notice under Sections 139(9) or 143(1). To resolve this, reconcile the data by comparing the figures in your AIS and Form 26AS with your income statements or Form 16. If you identify discrepancies, file a revised return with the corrected information. TaxBuddy’s automated comparison feature helps detect mismatches instantly and suggests the necessary corrections to prevent delays.
Q10. Can refund delays occur due to pending tax notices?
Yes. Refunds are automatically held by the Income Tax Department if there are pending notices or discrepancies under scrutiny. For instance, if your return has been selected for verification under Section 143(2) or if you’ve received an intimation about underreported income, the refund will not be released until the matter is resolved. Taxpayers should respond to notices promptly through the “e-Proceedings” section or seek professional help from TaxBuddy’s expert team, which handles responses and document submissions on your behalf.
Q11. Whom should I contact for unresolved refund cases?
For unresolved refund cases, taxpayers can contact the Central Processing Centre (CPC) helpline in Bengaluru to check the refund status. If the refund has been processed but not credited, contacting NSDL with the Refund File Dispatch (RFD) number can help trace it further. When regular channels fail, filing a complaint under the “Grievance” section of the income tax portal is recommended. Alternatively, escalation through CPGRAMS or the Income Tax Department’s verified social media handles often yields quicker responses.
Q12. Does Section 244A provide interest on delayed refunds?
Yes. Under Section 244A of the Income Tax Act, 1961, taxpayers are entitled to receive interest on refunds delayed beyond the standard processing period. The interest is generally calculated at 0.5% per month or part of the month from the date of filing the return until the refund is credited. However, if the delay occurs due to incorrect information or pending compliance from the taxpayer’s side, the interest benefit may not apply. This provision ensures fair compensation for delays that are attributable to the Income Tax Department’s processing time.
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