Income Tax Refund Still Stuck? Know Steps Taxpayers Should Adopt

In case you haven’t received your refund, and your refund status shows “processing”, then you are not alone. Several taxpayers are also facing the same problem even after filing and verifying their returns on time.

Such delays are happening for specific reasons. One of the main reasons is the slowdown in refund issuances this year. This year, from April to September 2025 refund payouts were lower in comparison to the same time last year. Delays occur when fewer refunds are released and more returns are filed.

Another reason for the delay is the in-depth inspection by the Income Tax Department because returns that show higher refund claims under the old tax regime are getting more inspection.

In case of any mismatch data or unusual pattern, the Income Tax Department flags cases for manual review. Even a small mistake or mismatch between the income tax return, the Annual Information Statement (AIS) and Form 26AS can cause the file to be held back for verification.

Income tax refunds often get delayed due to small procedural or technical issues rather than any problem with the taxpayer’s return. For instance, a refund cannot be issued if the bank account is not pre-validated on the income tax portal or if details such as the IFSC code, account number, or PAN linkage are incorrect. In addition, even when a return is filed before the due date, the refund may get stuck if the taxpayer does not complete e-verification within the prescribed time.

In some cases, the Income Tax Department may keep your refund on hold if there are unpaid tax demands from previous years. Before issuing the refund, the department is permitted to first adjust it against any outstanding tax dues and then release only the remaining balance, if any.

For the current assessment cycle, the Centralised Processing Centre must process income tax returns by December 31, 2026. If a return remains unprocessed after this date, the department can no longer process it, but the taxpayer still retains the right to receive the refund. Because of this deadline, the department carries out additional checks on cases that are flagged, which can slow down the processing speed in the initial stages.

What Steps Must Taxpayers Take?

1. Taxpayer must check for mismatches in AIS or Form 26AS in case of delay, confirm that their bank account is pre-validated, and make sure no communication from the department has been missed.

2. If your tax refund is taking much longer than usual to come through, you can file a complaint on the income tax website to let them know and get it sorted.

Getting your tax refund late can be annoying, but usually it’s because something needed checking or fixing. Once that’s sorted, the refund is released. This year things are a bit slower, but refunds are still being paid after the issues are resolved.