Why your Income Tax refund is still pending in 2025 – Key issues and steps to check status

ITR refund delays in 2025 are affecting thousands of taxpayers due to verification backlogs, mismatched details, and pending high-value claims. Here’s why refunds are held up and how to check your status instantly.

As the country’s tax-filing season for Assessment Year (AY) 2025-26, ends, the larger part of Indian taxpayers is still waiting to receive their income-tax refunds – despite the statutory deadline for filing their returns having ended on September 16, 2025. While most returns have been processed, Income-Tax Department’s refunds remain pending with it, frustrating tax payers, earners and investors.

In general, it takes the Income-Tax Department around four to five weeks to credit the refunds to the taxpayer’s bank account after e-verification of the returns. However, various procedural, as well as technical, issues have extended the process beyond the stipulated timeline for a large number of filers this year.

What are the reasons for delay in refunds?

Income-Tax Department officials and tax experts attribute the delay to a host of factors.

Income data verification: Tax officials said that there has been a spate of income verification of return filings, following an AIS or Form 26AS mismatch. Where such mismatch issues are reported, the returns are queued for a manual verification, which takes time.

Errors by filers: Taxpayers have also faced delays due to errors in their submissions such as providing incorrect IFSC code or account number or an unvalidated bank account for crediting refunds, or PAN-Aadhaar mismatch, among others. Even when the returns are processed, the refunds are not credited due to these issues.

Large refund claims under scrutiny: The Central Board of Direct Taxes (CBDT) had said that many large refunds were under examination. They have been referring the high-value refunds, as well as those where mistakes were detected and flagged (red-flagged), for detailed scrutiny. It is taking time to analyse the refunds as each one is large. However, refunds in cases with less refund value are being credited. Officials also said that most of the genuine refunds would be processed by December.

The delay in the crediting of refunds, not only hurts cash flows of taxpayers, but also has some wider implications:

Investor impact: The delay in the refunds can also impact investor sentiment and their liquidity decisions, particularly in the case of individuals who bank on the refunds to meet their savings or investment goals.

Search volume: The income tax department search volume has shot up, with the term “Income Tax Department” becoming the third-most searched on Google.

How to track refund status?

Taxpayers can track their refund status through the Income-Tax Department’s e-filing portal. The process to track refund status is as below:

Step 1: Visit the e-Filing portal and log in with your user ID and password.

Step 2: Go to e-File > Income Tax Returns > View Filed Returns.

Step 3: Select the relevant assessment year for which the status of the refund needs to be tracked and click on ‘View Return Details’.

Step 4: The taxpayer’s refunds are mentioned under the tab ‘Refund’, and the refund status is displayed under the column ‘Refund Status’.

The refund statuses mentioned on the portal are:

“Processed” – The income tax department has finished the processing of the ITR. The department issues a notice if it finds any issues.

“Refund Initiated” – The income tax department has initiated the process to credit the refund amount.

“Refund failed” – The refund could not be credited for various reasons.

“Refund Credited” – The refund amount has been credited in the taxpayer’s bank account.

If the refund status is showing “refund failed”, then it is an issue with the bank or e-verification. In such a situation, the taxpayer needs to update the account information or validate the account to receive the refund.

Note that refund status is updated in real time.