Income Tax Refund Mystery Solved? CBDT Reveals What's Holding Them Back

The Central Board of Direct Taxes (CBDT) has addressed delays in income tax refunds for FY 2024-25. The delays are due to an increased workload and deeper scrutiny of "unusual" returns, particularly those with large claims.

If you have been refreshing the income tax portal every other day waiting for your refund, you're definitely not alone. Many taxpayers across the country are still waiting for their ITR refunds for FY 2024–25, and the silence around the delay has only added to the frustration.

Now, there's finally some clarity.

Why Are Refunds Getting Delayed? CBDT Explains

CBDT Chairman Ravi Agrawal recently addressed the issue, revealing that many ITRs filed this year appear “unusual” or need deeper scrutiny. The department is also dealing with a major workload spike, having settled 40% more appeals compared to previous years.

As a result, some returns, especially those involving larger refunds, are being checked more thoroughly before approval.

Common Reasons Your Refund May Be Stuck

Refund delays can stem from several issues, including:

• Calculation or arithmetical errors
• Incorrect or inflated claims
• Deductions submitted after deadlines
• Unvalidated or incorrect bank account details
• Automated system flags on unusually large refund claims

Since the verification system is mostly automated, even a small discrepancy can pause your refund temporarily.

Good News: Refunds Expected by November-End or December

Agrawal assured the public that most pending refunds should be released by the end of this month or by December. While the delay is frustrating, the waiting period may not extend much further.

Tax experts also note that large refund claims undergo additional automated checks, which is why they generally take longer than small ones.

What You Should Do If Your Refund Is Delayed

While the backend systems work through their checks, taxpayers can take a few steps to prevent further delays:

• Regularly log into the income tax portal for updates
• Check if your bank account is validated
• Look for requests under the ‘Worklist' tab asking you to confirm refund details
• Revise your return if incorrect deductions or credits were claimed
• Raise a grievance through the portal or contact the CPC helpdesk if nothing seems wrong

These actions can help clear bottlenecks quickly.

Will You Get Interest for the Delay? Mostly Yes

Under Section 244A of the Income Tax Act, taxpayers are entitled to 0.5% interest per month (6% annually) on delayed refunds.

Here's how interest gets calculated:

• If the refund is due to TDS, TCS or advance tax and the return was filed on time, interest is calculated from April 1 of the assessment year until the refund date.
• No interest is paid if the refund amount is less than 10% of your total tax liability.
• If you filed your return late, interest begins only from the actual filing date.
• For self-assessment tax refunds, interest is calculated from the later of the filing date or the date the tax was paid.