Many taxpayers are still awaiting the refund for the income tax returns (ITR) filed this year (AY 2025-26). The refunds have likely been held back by the department due to some mismatch in ITR or doubtful
deduction claims red-flagged by the system. In several cases, taxpayers receive notices or intimation emails from the income tax department instead of the refund amount. Here’s why this happens and how to respond:
Refund delays usually arise because the return is not fully processed or because the tax department has flagged a mismatch or compliance issue. One of the most common reasons is ITR not being verified. Filing the return is only the first step; verification — either through Aadhaar OTP, net banking, EVC, or by sending a signed ITR-V to CPC Bengaluru — is mandatory. An unverified return is treated as invalid, and no refund is issued.
Income Mismatch
Another frequent reason is mismatch in income or tax details. The tax department cross-checks your return with data available in Form 26AS, Annual Information Statement (AIS), and Taxpayer Information Summary (TIS). If income reported by banks, employers, mutual funds, or other institutions does not match what you declared, the system may withhold the refund and issue a notice seeking clarification.
Section 143(1) Intimation
In some cases, taxpayers receive an intimation under Section 143(1). This is not always bad news. It is a preliminary assessment where the department informs you whether your return has been accepted as filed, adjusted, or if a demand or refund arises. If the intimation shows a lower refund or a tax demand, it is usually due to arithmetic corrections, disallowed deductions, or mismatch in TDS claims. Carefully comparing the intimation with your filed return is essential before taking any action.
Outstanding Tax Demands
Refunds can also be delayed due to outstanding tax demands from previous years. Even a small unpaid demand can result in adjustment of your current refund. In such cases, the department typically sends a communication informing you that the refund has been adjusted against earlier dues. Taxpayers should log in to the income tax portal and verify whether the demand is correct. If it is incorrect or already paid, a response must be submitted online.
Incorrect Bank Account Details
Incorrect bank account details are another overlooked reason. Refunds are credited only to pre-validated bank accounts linked with PAN. If the account is closed, inactive, or not validated, the refund will fail. The status may show “Refund failed” or “Refund issued but not received.” Updating and validating the correct bank account on the portal usually resolves this issue.
For Clarification
Sometimes, the notice received is a request for additional information or clarification. This may relate to high-value transactions, large deductions claimed, or income from capital gains or foreign sources. Such notices should never be ignored. Responding within the stipulated time through the e-filing portal is critical to avoid further scrutiny or conversion of refund into a demand.
What Should Taxpayers Do?
If you have received a notice, the first step is to log in to the income tax e-filing portal and check the exact communication under the “e-Proceedings” or “Pending Actions” tab. Download the notice or intimation, read it carefully, and match it with your return, Form 26AS, and AIS. If the department’s calculation is correct, accept it. If not, submit a reasoned response with supporting documents.
It is also important to track your refund status separately. Even without a notice, refunds can take time due to backend processing, especially during peak filing seasons. If the status shows “Refund issued”, but the amount is not credited, checking with your bank and confirming the refund reference number can help.
Ignoring tax notices is a serious mistake. What may begin as a routine clarification can escalate into penalties, interest, or even reassessment if left unanswered. On the other hand, prompt and accurate responses often lead to faster resolution and release of refunds.
