Eyeing a fat tax refund in 2025? Here’s why the taxman might hit the brakes
New Delhi: As over 1.16 crore income tax returns flood in for Assessment Year 2025–26, a growing number of taxpayers are discovering that their much-awaited refunds are stuck in limbo. The culprit? A cocktail of delayed forms, tighter scrutiny, and old ghosts from past filings.
Why Your Refund May Be Stuck
This year’s tax season began on a shaky note. Thanks to the late release of ITR utilities, the filing window shrank dramatically:
- ITR-1 & ITR-4 utilities arrived only on May 30.
- ITR-2 & ITR-3 didn’t show up until July 11.
- ITR-5, ITR-6 & ITR-7? Still missing in action!
- To cope, the government pushed the filing deadline to September 15, 2025. But the chaos didn’t stop there.
- Frequent tax reforms — from the new tax regime becoming default to stricter rules around AIS/26AS mismatches — have turned this filing season into a minefield.
Flagged for Scrutiny? Here’s What That Means
According to CA (Dr) Suresh Surana of RSM India, if your return claims an unusually high refund, the system may flag it. When this happens:
- The refund is frozen until verification finishes.
- Discrepancies with AIS/Form 26AS must be resolved first.
- “Once flagged, the system doesn’t release refunds until complete rechecking,” Dr Surana explained.
Old Dues Coming Back to Bite
Even if your current ITR is squeaky clean, the tax department can withhold or adjust your refund against pending demands from previous years, sometimes catching taxpayers completely off guard.
What You Can Do Right Now
- Filed and e-verified your return, but still waiting? Try this:
- Check refund status under “View Filed Returns” or “Refund/Demand Status”.
- Ensure your bank account is pre-validated & linked to the portal.