Still Awaiting Your Income Tax Refund? Here’s Why AY 2026-27 Refunds Are Stuck

Several taxpayers who furnished Income Tax Returns (ITRs) for the Assessment Year 2026-27 are awaiting their refunds. The income tax refunds are delayed this financial year primarily because the tax department has discovered discrepancies in ITR or suspicious deductions/exemption claims flagged by the system.

Rather than sending refund amounts to taxpayers, the CBDT (Central Board of Direct Taxes) had sent notices or intimations pointing out to them that discrepancies had been found in their returns and recommended that they furnish a revised return by December 31, 2025, to be safe from penal actions or litigations.

Usually, income tax refunds are delayed when the tax department finds mismatches or compliance issues in your returns or when returns are not completely processed. One of the common reasons is when returns are not verified. The ITR filing process is not complete until you verify your return after filing it. The return verification process can either be completed using Aadhaar OTP, net banking, or EVC or by sending a signed ITR-V to CPC Bengaluru. Unverified returns are considered invalid, and in such cases, refunds are not released.

Discrepancy in Reported Income

Another reason that causes return delay is a mismatch in income or tax details. When the return reaches the tax department, details mentioned in Form 26AS, Annual Information Statement (AIS), and Taxpayer Information Summary (TIS) are cross-checked. The system holds your refunds in case the income reported by banks, employers, mutual funds, or other institutions does not match what you reported. In this case, notices are issued to taxpayers seeking clarification.

Section 143(1) Intimation

In some cases, taxpayers are sent intimations under Section 143(1). Receiving this intimation is not always bad news. These intimations are issued by the tax department to inform taxpayers that their returns have been accepted as filed or adjusted, or if a demand or refund arises. If such intimations show a lower tax demand or refund amount, then do not be afraid; it is due to arithmetic corrections, disallowed deductions, or mismatches in TDS claims. If you have also received an intimation under Section 143(1), then it’s advised not to take any legal action before thoroughly comparing its details with your filed return.

Incorrect Bank Account Details

Incorrect bank details in returns are also a reason why refunds are delayed. Refunds are only credited to the taxpayers having pre-validated bank accounts linked with their PAN. In cases where accounts are closed, inactive, or not validated, refunds are kept on hold. In this case, the system demonstrates “Refund failed” or “Refund issued but not received.”