No updates, no refunds: Experts explain what's causing ITR delays

Compliance mismatches and backend slowdowns are keeping refunds stuck, taxpayers advised to be proactive

 

Taxpayers across the country are increasingly anxious as their income tax returns (ITRs) continue to show the status “under process” for months, with refunds for some yet to credit in bank accounts. Experts say this year’s delays are being driven by both technical and compliance-related reasons, leaving many salaried employees, professionals, and small businesses waiting longer than usual.

 

Why are ITR refunds delayed?

According to Rohit Jain, managing partner at Singhania & Co., the delays are the outcome of a combination of factors. “On the technical side, the increased volume of filings and backend verification checks on the new e-filing portal have slowed down processing. On the compliance front, mismatches between reported income and AIS/TIS data, incorrect bank details, incomplete pre-validation of accounts, and discrepancies in TDS claims are causing additional scrutiny before refunds are issued,” he explained.

 

 

Niyati Shah, chartered accountant & vertical head – personal tax at 1 Finance, added that while automation has improved refund timelines over the past few years, even minor discrepancies are now being flagged. “Compliance mismatches, particularly between Form 26AS/Annual Information Statement (AIS) and the income reported in ITR are triggering additional verification. Technical slowdowns in the CPC (Centralised Processing Centre) due to the sheer volume of filings close to the deadline are also a reality,” she said.

Who is most affected?

Shah pointed out that salaried taxpayers expecting refunds due to excess TDS are among the worst affected. Self-employed professionals with multiple income streams are also facing hurdles where reconciliation is complex.

 

She cited the case of a Mumbai-based IT consultant whose refund of nearly Rs 1.8 lakh was stuck for four months because foreign remittance receipts required additional verification under FEMA-linked compliance. Small businesses, too, are seeing slower processing when GST turnover declarations do not fully align with ITR data.

What can taxpayers do?

 

Experts emphasise that passively waiting is not the solution. Shah advised the following steps:

 

• Log in to the income tax portal and check for pending e-verification or mismatch notices in AIS/TIS. 
• File a grievance through the ‘e-Nivaran’ mechanism or raise a ticket on the CPGRAMS portal. 
• For high-value refunds pending for more than six months, escalate the matter to the jurisdictional Assessing Officer.

 

Impact on financial planning

Refund delays, according to Shah, can directly disrupt liquidity and cash flow. “Many taxpayers plan EMIs, insurance premiums, or investments assuming timely refund credit. Delays force them to dip into savings or borrow at a cost, which defeats the very purpose of TDS deductions being refunded,” she said. Her advice, treat refunds as contingent inflows, not guaranteed cash flows. Building buffers and optimising advance tax/TDS planning can reduce reliance on uncertain refund timelines.