ITR Refund Delay Despite Timely Filing: Refunds May Take Till December 2026

Filing an income tax return (ITR) within the due date does not necessarily guarantee timely processing or a refund, as reflected in a grievance response recently issued by the Income Tax Department.

In a recent case, the taxpayer had filed the return for FY 2024–25 (AY 2025–26) on time. With no update on processing, a grievance was raised on the income tax portal. While the grievance has since been marked as closed, the return itself continues to remain under processing.

The Department’s reply states that the return “may be processed within nine months from the end of the financial year.” Since the financial year ends on 31 March 2025, this effectively allows processing to continue until December 2026.

Tax professionals point out that closure of a grievance often only confirms that the case falls within statutory timelines and does not imply any acceleration of refund issuance.

The episode has also drawn attention to the unequal treatment of delays. While delayed refunds carry interest at 0.5% per month, taxpayers are charged interest at 1% per month for delays in advance or self-assessment tax payments.

In tax administration, compliance deadlines for taxpayers are rigid, while refund timelines for the department remain significantly more flexible.