Income Tax Refund Delay: Why Over 50 Lakh Taxpayers Still Waiting for ITR for AY 2025-26

Over 50 lakh taxpayers are still waiting for income tax refunds for AY 2025-26, despite over 8 crore returns being processed. Taxpayers are advised to check refund status online, validate bank accounts, and respond promptly to department alerts. 

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Over 50 lakh taxpayers yet to receive income tax refunds

Even though most income tax return filing work for the assessment year 2025-26 has been completed, a large number of taxpayers are still waiting for their refunds. Official data shows that more than 50 lakh people have not yet received their money, even months after filing their returns.

While the Income Tax Department has processed a record number of returns this year, refunds for many cases remain pending due to technical checks and legal scrutiny.

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How many returns have been processed so far

As per Income Tax Department data available till January 11, a total of 8.8 crore income tax returns were filed for the assessment year 2025-26. Out of these, 8.68 crore returns were verified, and 8.15 crore returns were fully processed.

However, around 53 lakh returns are still unsettled. Most of these pending cases involve refund claims, which means taxpayers are waiting to receive money back from the department.

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Why income tax refunds are getting delayed

Scrutiny tightened for refund claims

Tax experts say the main reason behind the delay is stricter scrutiny of returns. The department is closely checking returns that have claimed high refund amounts or show unusual figures.

The automated system compares the details in the return with data available in the Annual Information Statement (AIS) and Form 26AS. If there is any mismatch in income or tax credit details, the system flags the return for further review.

Returns that appear suspicious are sent for manual checking by tax officers, which takes more time and slows down refund processing.

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Foreign income checks under 'Nudge' scheme

The second phase of the Central Board of Direct Taxes’ ‘Nudge’ scheme has also added to the delay. Using information received through foreign data exchange, the department is identifying taxpayers who may not have reported foreign income or assets for the financial year 2024–25.

From November 28 onwards, messages were sent to such taxpayers. These returns are now being examined very carefully before any refund is released.

System pressure after deadline extensions

The return filing deadline was extended twice, leading to a heavy rush of filings in September. This put pressure on the automated systems.

Taxpayers whose return details do not match the information shared by banks, employers, or other institutions are receiving system alerts. These alerts must be resolved before refunds can be issued.

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Option of 'Updated Return' for corrections

Although the return filing deadline ended on December 31, 2025, taxpayers still have an option to file an 'Updated Return' under Section 139(8A). This can be done within 48 months from the end of the assessment year.

This option helps people who missed reporting income or made mistakes earlier. However, an updated return cannot be used to claim a refund or increase an existing refund. A penalty of up to 50 percent of tax and interest will apply. Those facing raids or surveys cannot use this facility.

What taxpayers should do now

Taxpayers waiting for refunds should log in to the income tax portal and check their refund status. They should ensure their bank account is validated and respond quickly to any email or SMS from the department. These steps can help speed up the refund process.