ITR Refund Delay: Why Processing Is Slower This Year And What You Can Do Now

Income Tax Refund: Several taxpayers are still awaiting to get their refunds for Income tax return for FY 2024–25 (AY 2025–26), which has been noticeably slower this year. Experts say the delays happen due to a combination of late ITR form releases, tighter data-matching protocols and a heavier load at the Centralised Processing Centre (CPC), all of which have increased verification cycles.

CA Shefali Mundra, Tax Expert at ClearTax, says processing slowed because “multiple friction points hit at the same time.” Several ITR utilities and forms were released late, compressing the effective filing window and causing a rush of returns. “This bunching piled up at CPC. On top of volume, the department is leaning harder on data-led checks, especially

where AIS, Form 26AS or TIS figures don’t align. Even duplicated entries, property transactions are common, push returns into slower lanes,” she notes.

According to her, high-value or unusual refund claims are facing deeper verification. “The department is examining questionable claims more closely and asking for revisions or additional details when needed, which naturally extends timelines,” she adds.

Mundra highlights that salary, NRI and property capital gains returns are getting the most scrutiny because they are the “most mismatch-prone.” Salary cases often show inconsistencies between Form 16, TDS credits or multiple employers. NRI filings involve DTAA positions and foreign tax credit compliance, which require precise documentation. Property capital gains, she says, undergo strict cross-checks against sale value, stamp duty records, TDS on property and AIS entries, so even small gaps delay processing.

Gaurav Jain, Partner – Direct Tax, Forvis Mazars India, attributes the initial delay in ITR form release to “several recent regulatory updates.” The CBDT has revised capital gains reporting formats, foreign asset disclosures, and TDS/TCS reconciliation fields. “These changes required additional testing and synchronisation. When multiple updates coincide, rollout timelines naturally stretch,” he explains.

Both experts stress the same advice: prepare early and reconcile thoroughly. Taxpayers should match income and tax credits across AIS, TIS and Form 26AS, verify bank account pre-validation, use the correct ITR form, and file Form 67 on time for foreign tax credit claims. Businesses must ensure GST and TDS records sync correctly.

“Early preparation means faster, cleaner filing and far less risk of scrutiny,” Jain says.