Will your income tax refund be stopped if your ITR is not processed by December 31, 2025?

Many taxpayers assume that once they file their income tax return (ITR), their job is done. However, filing ITR is only the first step. The return is considered complete when the Income Tax Department processes it within a legally defined time frame. With the December 31, 2025 deadline to file revised ITR and belated ITR for the income earned during FY 25-24 near now, a question arises what will happen if the Income Tax Department doesn’t process your ITR by that deadline? Or, will their income tax refund be stopped if your ITR is not processed by December 31, 2025? To know about ITR deadlines, rights of taxpayers, and the consequences of delayed processing becomes important when a refund is involved or when no intimation by the Income Tax Department is received for a long period.

What happens if the Income Tax Department doesn’t process ITR by December 31, 2025?

According to Chartered Accountant Suresh Surana, the Centralised Processing Centre (CPC) is required to process the ITR filed during FY 2024–25 relevant to AY 2025–26, and issue an intimation under Section 143(1) within 9 months from the end of the financial year in which the ITR is filed, as prescribed under Section 143(1) read with the proviso thereto.

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Accordingly, in this case, where an ITR is filed on July 31, 2025, or September 16, 2025, or December 31, 2025 (belated ITR), the statutory time limit available to CPC for processing the return would expire on December 31, 2026.

Surana says: "If CPC does not process the return within this prescribed period, it loses the legal authority to issue an intimation under Section 143(1) thereafter."

According to Surana, the fact that ITR was filed on September 16, 2025, which falls within the extended due date applicable to non-audit taxpayers for FY 2024-25, does not either accelerate or defer the timeline for processing ITR. The 9-month period commences from March 31, 2026, being the end of the financial year in which the ITR was filed, and not from the actual date of filing.

Surana says: "Consequently, irrespective of whether the ITR was filed on July 31, 2025, September 16, 2025, or even by the belated ITR deadline of December 31, 2025, the CPC lawfully has time until December 31, 2026 to process the return and issue the intimation under Section 143(1)."

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According to Surana, once the statutory time limit to process an ITR by the CPC is over, the ITR attains finality as filed, and no adjustments under Section 143(1), whether resulting in a demand or otherwise, can be made by CPC.

Will your tax refund be stopped if your ITR is not processed by December 31, 2026?

Surana says: "In such circumstances, if a tax refund is due as per the return, the taxpayer becomes entitled to the tax refund along with interest under Section 244A, calculated from the relevant date until the date of the grant of refund."

Surana says that in cases where an ITR remains unprocessed beyond the statutory timeline, taxpayers may take proactive steps such as raising an online grievance through the e-Nivaran/CPGRAMS mechanism or the e-filing portal, or submitting a written follow-up request for the processing of return."

You can also submit your grievance here: https://eportal.incometax.gov.in/iec/foservices/#/fo-greivance/submit/ormlanding