ITR - Slow processing and refund for Assessment Year 2025-26

About refunds information  found on portal https://www.incometax.gov.in/iec/foportal/help/refund_status_user_manual

“1. Overview

Income tax refund means a refund amount that is initiated by the income tax department if the amount paid in taxes exceeds the actual amount due (either by way of TDS or TCS or Advance Tax or Self-Assessment Tax). The tax is calculated after taking into consideration all the deductions and exemptions at the time of assessment by income tax department.

Refund processing by the tax department starts only after the return is e-verified by the taxpayer. Usually, it takes 4-5 weeks for the refund to be credited to the account of the taxpayer. However, if refund is not received during this duration, the taxpayer must check for intimation regarding discrepancies in ITR; check email for any notification from the IT department regarding the refund. The taxpayer can also check refund status on the e-filing as per the process detailed hereunder.”

Delay in 2025 for AY 2025-26- even in non audit  and simple ITR:

In social media we find discussion about delays in refund of  tax. We also find gossips like refunds are being speeded up during last few days.

People conversant with the subject matter and tax payers are feeling that for the AY 2025-26 processing of ITR and issue of refunds is slower in comparison to earlier years.

For example, the following table shows actual dates of  successful e-verification of ROI and refund for last four years  in a particular case of an assessee say A:

From above table we notice that earlier there was reduction in period  taken for refund from 39 days to  33 days and 13 days in AY 2024-25. In fact in some cases refunds were credited in account of taxpayer within few hours and days from time of e-verification of returns.

However, for AY 2025-26, 90 days have lapsed, and refund is awaited.

In fact, progress in processing of ITR  is also not shown on the portal and even for mismatch, data are not available. That means processing of comparison of ITR with reports like form 26AS has not taken place, otherwise a mismatch report must have appeared as to items of mismatch or that there is no mismatch.

There are cases of other assesses also  where ROI is a bit more elaborate and involves some information in AIS, TIS, capital gains etc.

Urgent refunds were received in some cases where ROI was a simple one relating to few heads of income like salary and house property and ROI and all other information were similar to earlier year.

Therefore, we find that as against claim of department to issue refunds within 4-5 weeks there are more delays and any reason is not found on the portal for such delay.

Some other relevant information:

Data analysis from information available on portals of IT Department like  https://eportal.incometax.gov.in/iec/foservices/#/pre-login/success-enablers

The above table also clearly indicates fact of delays in refunds. Any amount of refund credited in accounts of taxpayer or even tax refund determined is not indicated on the portal.

Big refunds: Big amount of refund is required to be made by government. Primary reason is that TDS and TCS are at higher rates and these need further reduction and rationalisation of not only rates but also the threshold limit for no TDS/ TCS.

Government will be gainer if insistence is made for more  tax in advance tax instalments and TDS and TCS are reduced.