Income Tax Refund delay explained: Why are FY 2024-25 refunds taking longer?

Many taxpayers who filed their income tax return (ITR) for the financial year 2024-25 (AY 25-26) are anxious about delayed tax refunds. This is at a time when the Income Tax Department is well within its statutory timeline to process ITRs and issue refunds.

The income tax refund process can take longer in cases where high-value claims are involved. Such returns are typically subjected to additional automated checks and validations. In some cases, refunds can also be temporarily adjusted or withheld under Section 245(2), which allows the department to set off refunds against pending tax demands.

Refunds can also be held back in some situations under Section 245(2) of the Income Tax Act, 1961. But in many cases, the delay has nothing to do with the system. It often comes down to simple mistakes made by taxpayers themselves.

In such cases, the Income Tax Department can send them intimations. Taxpayers need to respond to such intimations to receive refunds.

Another factor contributing to slower refunds is the Central Board of Direct Tax’s (CBDT) ‘Nudge’ campaign, launched in December 2025. As part of this initiative, taxpayers whose returns show discrepancies are being proactively alerted through SMS and email. They are encouraged to either accept the variation pointed out by the Income Tax Department or correct it by filing a revised or updated return. While the campaign is aimed at improving voluntary compliance, it has also meant that refunds linked to such cases are held back until the taxpayer responds.

Many taxpayers often wait anxiously for their income tax refunds, especially when there is a delay in processing. By following a few straightforward steps on the official e-filing portal, you can quickly see whether your refund has been processed or is still under review. Here’s how you can check your income tax refund status via PAN card on the e-filing website:
Step 1: Visit the e-filing website page- https://www.incometax.gov.in/iec/foportal/
Step 2: Click on the login button and enter your PAN details and password.
Step 3: Upon successful login, the user will land on the Home Page. On the taskbar of Home Page, click on e-file --> Income Tax Returns --> View Filed Returns
Step 4: A complete timeline of income tax returns filed by the user will be displayed