ITR Refund Delayed in 2025? Know Why Your Tax Return Is Under Investigation
Why Are ITR Refunds Delayed in 2025?
ITR refund delayed: If you’re among the many taxpayers waiting anxiously for your income tax refund in 2025, you’re not alone. Over 1.16 crore ITRs have already been filed for AY 2025–26, and more than 1.09 crore have been verified. Yet, thousands are still waiting for refunds to arrive. What’s causing the delay? Experts say it’s a mix of late utility releases, stricter data checks, rule changes, and pending assessments from previous years.
ITR Filing Started Late in 2025
Unlike previous years when ITR utilities were available in early April, this year the process began almost two months late. The ITR-1 and ITR-4 utilities were released only on May 30, and ITR-2 and ITR-3 on July 11. This delay pushed back return filings, verification, and ultimately refund processing.
Additionally, utilities for ITR-5, 6, and 7 are still pending, affecting businesses, trusts, and professionals who file using these forms. The government has extended the filing deadline to September 15, 2025 for these categories.
More Stringent Data Matching in 2025
According to CA (Dr.) Suresh Surana, this year’s refund scrutiny is tighter than ever. The Income Tax Department is matching your return data more deeply with third-party sources like:
- AIS (Annual Information Statement)
- Form 26AS
- TDS details and financial transactions
If there’s any mismatch or if you’ve claimed an unusually high refund, your return could be flagged for investigation, and refunds will be withheld until verification is complete.
Old Assessments Also Causing Refund Hold
One major reason refunds are being held is the pendency of old tax assessments. If the Income Tax Department has unresolved demands or assessments from earlier years, they can adjust or hold back your current refund until those are settled.
What Changed in Tax Rules This Year?
The July 2023 Budget made the new tax regime the default, while the 2024 and 2025 Budgets introduced technical changes such as:
- New disclosure requirements in ITR forms
- Expanded scope of AIS/26AS
- Tighter checks for credit matching
- Additional information reporting in utilities
These changes have made filing more complicated, requiring tax departments to cross-check returns more thoroughly before issuing refunds.
How to Check Your Refund Status
If you’ve already filed and e-verified your ITR but haven’t received a refund within 4–5 weeks, you can:
- Go to the income tax e-filing portal
- Visit “View Filed Returns” or “Refund/Demand Status”
- Make sure your bank account is pre-validated
- Use the “e-Nivaran” grievance redressal feature
- Escalate to CPC Bengaluru or your jurisdictional assessing officer if unresolved
Interest on Delayed Refunds
The good news? If there’s a significant delay in your refund, the Income Tax Department must pay interest under Section 244A of the Income Tax Act. So, while the wait may be frustrating, you’re legally entitled to compensation.
Key Takeaways
- Refunds in 2025 are delayed due to late ITR utilities, rule changes, and data mismatch verifications.
- Pending old assessments may cause the Income Tax Department to withhold or adjust refunds.
- Use AIS and 26AS to cross-check your return details before filing to avoid mismatches.
- If your refund is delayed, file a complaint through e-Nivaran and track status online.
- Refunds delayed beyond stipulated time will earn interest as per law.
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