Many taxpayers are experiencing delays in receiving their income tax refunds, despite the Income Tax Department processing a significant number of smaller refund claims. These delays are often attributed to errors made during the filing process, rather than system checks and validations.
Under Section 143(1), the Income Tax Department has until December 31, 2026, to process returns filed for the financial year 2025–26. Refunds may also be withheld under Section 245(2) for verification of past tax demands. However, a significant number of delays are a result of mistakes made by taxpayers themselves, impacting the interest payable on refunds under Section 244A.
One common reason for refund delays is the failure to verify the return within 30 days of filing, which can lead to the return being considered invalid or belated. It is crucial for taxpayers to verify their returns promptly to avoid processing delays.
Refunds are only issued to bank accounts linked to the PAN, pre-validated, and active on the e-filing portal. Issues arise when taxpayers fail to update or validate their bank account details, such as changes in IFSC codes after a bank merger. Ensuring the correct bank account information is updated on the e-filing profile can prevent refund delays.
Ignoring notices for defective returns, mismatch in TDS details, and claims that appear doubtful to the system are also common factors contributing to refund delays. Timely responses, addressing errors, and submitting required documents promptly can help prevent these delays and ensure a smoother refund process.
By staying vigilant, updating bank details, verifying returns promptly, correcting errors, and reviewing AIS before filing, taxpayers can minimize refund delays and ensure they receive their refunds promptly and without unnecessary complications.