The Central Board of Direct Taxes (CBDT) has granted taxpayers an extra day to file their returns, extending the deadline from September 15 to September 16. Despite over 7.57 crore returns being filed by September 23 for the Assessment Year 2025–26, numerous individuals are still awaiting their income tax refunds.
The delay in refund processing is due to the examination of flagged refund claims, particularly those labeled as “high-value” or “red-flagged” because of unusual or incorrect deductions. CBDT Chairman Ravi Agrawal has confirmed that these pending refunds are anticipated to be processed by December 2025. The department is meticulously reviewing cases involving high-value claims or potentially inaccurate deductions, which has contributed to the slowdown in the refund process.
While low-value refunds have been disbursed, refunds requiring further scrutiny are being held back due to suspicious deduction patterns detected by the system. The department is actively working to reduce litigation in direct tax matters and expedite appeal disposals to clear the backlog accumulated during the pandemic years.
Refund issuances have decreased by nearly 18% this year, totaling around Rs 2.42 lakh crore between April 1 and November 10. Agrawal attributed this decline to a reduction in the number of refund claims and the earlier rationalization of TDS rates, resulting in smaller refund amounts overall. The department’s primary objective is to ensure prompt refunds for legitimate taxpayers while filtering out incorrect or inflated claims to uphold fairness within the system. It is anticipated that most outstanding refunds will be processed by the conclusion of December.