Still Waiting for Your Tax Refund? You’re Not Alone. Here’s Why

It’s that time of the year again. You filed your Income Tax Return (ITR) diligently, probably back in July or August, expecting a nice, timely refund. You calculated the amount down to the last rupee, planned a small treat for yourself, or maybe just looked forward to that extra cash settling back into your bank account where it rightfully belongs. But then, weeks turned into months, and your refund status on the ITR portal still shows the dreaded “Under Processing” or worse—”Refund Paid” with absolutely no money in sight.

If this is you right now, take a deep breath. The first thing you need to know is this: You are not alone.

Millions of taxpayers across India are in the exact same boat, religiously checking their portals and bank accounts with growing frustration and anxiety. The questions start piling up: Did I do something wrong? Is my money lost? Should I file a complaint? Is the system broken?

Let’s address these concerns head-on. The system isn’t necessarily broken, but it’s definitely overwhelmed. And there are very specific reasons why your refund might be stuck in bureaucratic limbo. Let’s break it down in simple, understandable terms so you know exactly what’s happening behind the scenes.

The Scale of the Task: Understanding the Numbers Game

Before we dive into the “why,” let’s first look at the “what.” The government has released some recent statistics that put the entire refund processing challenge into proper perspective. As of 9th October 2025, here’s what the numbers look like:

Individual Registered Users: 1.35 Crore (13,549,380)
Returns Filed (for AY 2025-26): 7.72 Crore (77,201,407)
Returns Verified: 7.29 Crore (72,905,517)
Verified ITRs Processed: 6.23 Crore (62,310,238)

[Source: Official Income Tax Department Statistics as on 09-Oct-25]

Now, let’s do a quick calculation that reveals the real picture. The number of verified returns stands at about 7.29 crore, but only 6.23 crore have been successfully processed so far. That leaves a substantial gap of over 1.06 crore (10,695,279) returns that are verified but still sitting in the queue, waiting to be processed.

That’s more than 10 million files waiting to be manually or systemically reviewed, cross-checked, and cleared. To put it in perspective, that’s roughly equivalent to processing the entire population of a country like Portugal or Belgium. So, if your return is among this massive backlog, it’s not necessarily a red flag or an indication that something is wrong with your filing—it’s often just a matter of the system methodically working through an enormous volume of data, one return at a time.

Why is YOUR Specific Refund Taking So Long?

While the sheer volume of returns is a primary contributing factor to delays, several specific issues can put your individual return under the scanner, leading to frustrating holdups that seem to stretch on endlessly.

1. The Verification Process: The Step Most People Miss

Filing your ITR is only half the battle—and many taxpayers don’t realize this crucial fact. The next critical step is verification, and it’s where countless refunds get stuck in the first place.

You must log in to the income tax e-filing portal and complete the verification process using an EVC (Electronic Verification Code), Aadhaar OTP, net banking, or by sending a signed physical copy (ITR-V) to the Centralized Processing Centre (CPC) in Bengaluru within 30 days of filing.

Here’s the catch that trips up thousands of taxpayers: The clock for your refund processing only starts ticking after your return is verified, not from when you file it. If you filed your return in July but only got around to verifying it in September (maybe you forgot, or maybe you didn’t realize its importance), the tax department effectively considers your filing date as September for processing purposes.

Many taxpayers simply miss this step entirely, assuming that filing is enough. They then wonder why months pass with no movement on their refund, not realizing their return is technically incomplete in the system’s eyes.

2. TDS Mismatch: The Biggest Culprit

This is arguably the single biggest reason for refund delays, and it affects thousands of taxpayers every year, especially those who changed jobs, had multiple income sources, or whose employers made errors in their TDS reporting.

Your refund claim is heavily dependent on the Tax Deducted at Source (TDS) shown in your Form 26AS or the newer Annual Information Statement (AIS). The Income Tax Department cross-verifies the TDS amount you claim in your ITR against what appears in their system.

Let’s understand this with a real-world example: Imagine Mr. Sharma, a software professional from Pune. He changed jobs in December of the financial year. His first employer (Company A) deducted TDS of ₹40,000 from his salary for the nine months he worked there. His second employer (Company B) deducted TDS of ₹35,000 for the remaining three months. In his ITR, Mr. Sharma correctly claims a total TDS of ₹75,000 (₹40,000 + ₹35,000).

However, here’s where the problem occurs: Company A made an error while filing their quarterly TDS return (Form 24Q). They either reported Mr. Sharma’s PAN incorrectly, transposed some digits, or made a data entry mistake. Because of this seemingly small error, the Income Tax Department’s automated system (which populates your Form 26AS) only shows the TDS of ₹35,000 from Company B. The ₹40,000 from Company A is missing from the official records.

This creates a glaring mismatch of ₹40,000. The automated processing system immediately flags Mr. Sharma’s return, suspecting that he has over-claimed his TDS to get a larger refund. His file is now pushed into a separate pile requiring manual verification by a tax officer, who must contact Company A, request a correction, wait for them to file a revised TDS return, and then reconcile everything. This entire reconciliation process can easily take weeks, if not months, depending on how quickly the employer responds.

3. Inconsistencies in Income & Deductions: When Numbers Don’t Add Up

The Income Tax Department’s systems have become increasingly sophisticated over the years. They receive information from multiple sources: your employer (Form 16), banks (interest income), mutual funds (capital gains), and various other entities through the Annual Information Statement (AIS).

Did you report income from multiple sources? Claim large deductions under Sections like 80C (investments in PPF, ELSS, life insurance premiums), 80D (health insurance premiums), or HRA (House Rent Allowance)? If the numbers you declared in your ITR don’t perfectly align with the data the Income Tax Department has received from these other independent sources, it immediately raises a query that requires manual review.

For example:

If you claimed a high HRA exemption but your employer’s filed data shows a different rent payment amount
If you forgot to include interest income of ₹15,000 from a savings account, but the bank has reported it to the IT Department
If you claimed deductions for health insurance, but the insurance company’s records don’t match your claim
If you showed rental income that doesn’t match what the tenant’s employer has shown as rent paid (in case of TDS on rent)

Each of these discrepancies, even if unintentional or the result of honest mistakes, triggers a detailed review process that delays your refund.

4. Your Return is Selected for “Scrutiny Assessment”

Every year, a small percentage of returns are randomly or systematically selected for a detailed scrutiny assessment. This is a comprehensive, in-depth review where the tax department may ask for documentary proof for virtually every claim you’ve made—salary slips, bank statements, investment proofs, rent receipts, medical bills, everything.

If your return falls under scrutiny, the refund process is immediately put on hold until the entire assessment is completed, which can take anywhere from six months to over a year in some cases. Returns are typically selected for scrutiny based on:

Random selection by computer algorithms
High-value transactions that seem inconsistent with your income profile
Significant increase or decrease in income compared to previous years
Large claims for deductions or exemptions
Specific patterns that the system flags as requiring deeper investigation

5. Technical Glitches and Bank Account Issues: The Simple Yet Frustrating Delays

Sometimes, the delay has nothing to do with your tax filing accuracy and everything to do with simple technical or banking issues. Common problems include:

Failed Electronic Transactions: The NEFT/RTGS transaction initiated by the tax department fails due to technical issues at the banking level
Incorrect Bank Account Number: A single digit wrong in your bank account details means the money gets rejected
Name Mismatch: The name on your bank account doesn’t exactly match the name on your PAN card (for example, you have a middle name in one but not the other)
Account Not Pre-Validated: Your bank account hasn’t been pre-validated on the e-filing portal, causing the system to reject the refund transfer
Inactive or Closed Account: You mentioned a bank account that has since been closed or become dormant

When any of these issues occur, the refund bounces back to the IT Department, and you’re back to square one until you update the correct information and the refund is re-initiated.

What Can You Do Now? Your Comprehensive Action Plan

Waiting passively and checking your account every day is not just frustrating—it’s also unproductive. Here are concrete, actionable steps you can take right now to track your refund status and potentially speed up the entire process.

Step 1: Check Your Refund Status Regularly and Systematically

Don’t just check randomly. Set a schedule and monitor your status methodically:

Go to the official e-filing portal at https://www.incometax.gov.in/iec/foportal/
Log in using your PAN and password
Navigate to My Account > View e-Filed Returns/Forms
Check the processing status, which will typically show one of these:

“ITR Submitted” – Your return has been filed but not yet verified
“Under Processing” – Your return is verified and being processed
“Processed” – Processing is complete, and if applicable, refund has been initiated
“Refund Paid” – Money has been credited (check your bank if you don’t see it)
“Defective” – There’s an issue that requires your attention

Step 2: Validate Your Bank Account Details Immediately

One of the most common yet easily fixable issues is incorrect or unvalidated bank account information:

On the e-filing portal, go to My Profile > My Bank Accounts
Check that your account shows a “Validated” status
If it shows “Pre-Validated” or “Not Validated,” you need to complete the validation process
Ensure the account holder name matches exactly with your PAN card name
If you need to add or update bank details, do it immediately and wait for the validation to complete (usually takes 2-3 days)

A “Validated” status is absolutely crucial for a smooth and quick refund transfer.

Step 3: Monitor and Respond to Notices Promptly

The tax department communicates primarily through the e-filing portal and your registered email address. Missing their communication is one of the biggest mistakes taxpayers make:

Keep a close watch on your registered email (including spam/junk folders)
Regularly check the “e-Proceeding” section on the portal
If the department sends a notice (called “Intimation under Section 143(1)”) asking for clarification, additional documents, or pointing out discrepancies, treat it as urgent
Respond within the deadline given (usually 30 days)
Upload all requested documents clearly and completely

Remember: Delaying or ignoring your response will only delay your refund further. The department cannot process your refund until they receive the information they’ve requested.

Step 4: Use the “Submit Grievance” Option Strategically

If it has been more than 30 days since your return was verified and processed, and you still see no movement or communication regarding your refund, it’s time to escalate through the formal grievance mechanism:

Go to Services > Grievances > Register Grievance on the e-filing portal
Select the category “Refund”
Provide your grievance details clearly and concisely
Quote your PAN, Assessment Year, and Acknowledgement Number
Explain specifically what the issue is (for example, “Return processed on [date] but refund not credited after 45 days”)
Track your grievance regularly—you’ll receive updates and a grievance reference number

The grievance system typically generates a response within 15-30 days and often helps in getting your refund unstuck.

Step 5: File an RTI as Your Last Resort

If all else fails and you’re getting no satisfactory response, you have a powerful tool at your disposal: the Right to Information (RTI) Act.

File an RTI application addressed to the Centralized Processing Centre (CPC), Bengaluru
Ask specific questions such as:

“What is the current status of refund for ITR filed for AY 2025-26 with Acknowledgement Number [your number]?”
“What is the specific reason for the delay in processing my refund?”
“When can I expect my refund to be credited?”

You can file RTI online through the portal https://rtionline.gov.in/
The application fee is minimal (₹10)
The department is legally bound to respond within 30 days

Filing an RTI often prompts a definitive response and action, as it creates an official record and accountability.

Understanding the Timeline: What’s “Normal” and What’s Not

To set realistic expectations, here’s what a typical refund timeline looks like:

0-15 days after verification: Return enters the processing queue
15-45 days: Most straightforward returns without issues get processed
45-90 days: Returns with minor discrepancies or during peak processing times
90+ days: Returns with significant mismatches, under scrutiny, or with complex issues

If your refund crosses the 90-day mark with no communication from the department, it’s definitely time to take the active steps mentioned above.

The Silver Lining: Most Refunds Eventually Get Processed

It’s easy to feel helpless, frustrated, and even angry when waiting for money that is rightfully yours. The delay feels personal, especially if you had plans for that money or if it’s a substantial amount. However, it’s important to remember that the system, while slow and often cumbersome, is not arbitrary or designed to cheat you.

The statistics clearly show a continuous and massive effort to process returns. The numbers are steadily moving: from 7.29 crore verified returns to 6.23 crore processed means that over 85% of verified returns have already been cleared. The department is working through the backlog, and most refunds do eventually make their way to taxpayers’ bank accounts.

Key Lessons for Next Year: How to Avoid This Situation

Use this experience as a valuable lesson in financial discipline and tax compliance. Here’s what you should do differently next year:

Verify Your Form 26AS Before Filing: Download your Form 26AS or AIS about a week before filing your ITR. Ensure all TDS entries match your records. If there’s a mismatch, contact your employer or deductor immediately to get it corrected before you file.
Pre-Validate Your Bank Account: Don’t wait until after you file. Pre-validate your bank account on the portal well in advance, ideally at the beginning of the financial year.
Double-Check All Income Sources: Make sure you’ve included all income—salary, interest from savings accounts and fixed deposits, capital gains from stocks or mutual funds, rental income, and any other sources.
Verify Immediately After Filing: Don’t procrastinate on verification. Do it the same day or within 24 hours of filing your return.
Keep All Documents Ready: Maintain organized records of all your investment proofs, Form 16, bank statements, and receipts throughout the year, not just at filing time.
File Early: Don’t wait until the last week of July. Filing in May or June means less rush, fewer errors, and faster processing.

The Bigger Picture: Your Financial Journey

While waiting for your refund is certainly frustrating, use this time productively. This is an excellent opportunity to review your overall financial health, understand tax planning better, and educate yourself on various aspects of personal finance.

Every financial challenge is also a learning opportunity. The fact that you’re concerned about your refund shows you’re financially aware and responsible. Channel that awareness into building a stronger financial foundation for yourself.

Final Thoughts: Stay Patient but Stay Active

The key takeaway from all of this is simple: shift your mindset from being a passive waiter to an active tracker and manager of your tax affairs. By following the comprehensive action plan outlined above—ensuring your verification is complete, your bank details are correct and validated, promptly responding to any notices, and escalating through proper channels when necessary—you’re doing everything within your power to expedite the process.

Your refund will come. In the vast majority of cases, it’s just a matter of time and following the right steps. Stay patient, but stay active. Keep checking, keep following up, and keep your documentation ready.

Remember, you’re not alone in this journey—millions are waiting alongside you, and the system is working its way through. Your turn will come.