The Income Tax Department’s processing speed has slowed to a crawl, leaving over 1 crore taxpayers waiting for their refunds. Between October 13 and October 16, 2025, only 4,14,489 returns were processed – a number that has sparked frustration among millions of Indians who filed their returns months ago.
As of October 16, 2025, a staggering 1,05,84,866 verified ITRs remain unprocessed. This means that even though taxpayers have done their part by filing returns and the department has verified them, the actual processing and refund issuance remains stuck in bureaucratic delays.
Breaking Down the Numbers
Let me walk you through the actual data from the Income Tax Department’s official portal. The numbers tell a concerning story about the pace at which returns are being processed.
On October 13, 2025, the statistics showed that 6,31,93,991 verified ITRs had been processed. Fast forward to October 15, 2025, and that number stood at 6,36,08,480. The math is simple: only 4,14,489 returns were processed over two days.
To put this in perspective, 7,37,90,032 returns were verified as of October 13, which increased to 7,41,93,346 by October 15. This means that while the department verified an additional 4,03,314 returns during this period, the processing barely kept pace.
The gap between verified and processed returns continues to widen. On October 13, the pending count was 1,05,96,041 returns. By October 15, this had decreased marginally to 1,05,84,866 – a reduction of just 11,175 returns.
The Ground Reality for Taxpayers
The situation is causing real hardship for ordinary taxpayers who filed their returns in good faith and are now waiting for refunds that rightfully belong to them. Many filed their returns in July or August 2025, expecting refunds within the standard timeframe of a few weeks. Instead, months have passed with no movement.
The frustration is particularly acute because these are not cases where returns are awaiting verification. These 1,05,84,866 returns have already been verified by the Income Tax Department. They are simply waiting in queue for final processing and refund issuance.
Consider that the assessment year 2025-26 has seen 7,75,48,124 returns filed as of October 13, which increased to 7,77,72,987 by October 15. The department has managed to verify most returns reasonably quickly, but the processing bottleneck is creating a massive backlog.
With the Diwali festival approaching, many families had hoped to receive their tax refunds to help with festival expenses and celebrations. The timing could not be worse, as households across India are preparing for one of the most expensive times of the year in terms of shopping, gifts, and festivities.
Why the Slow Processing Speed
The processing rate of approximately 1,38,163 returns per day over this three-day period is remarkably slow given the scale of modern tax administration systems. For context, the department has over 13.5 crore individual registered users on its platform, and it verified over 4 lakh returns in the same period that it only processed a similar number.
This suggests that the bottleneck is not in the verification stage but in the final processing and refund issuance stage. Technical glitches, system capacity constraints, or procedural delays could all be contributing factors.
The discrepancy between verification speed and processing speed is particularly puzzling. If returns can be verified at a certain pace, the processing should theoretically be able to keep up, assuming adequate system capacity and staffing.
What This Means for Individual Taxpayers
If you are among the 1.05 crore people waiting for your refund, you are experiencing firsthand what happens when tax administration fails to scale efficiently. Your money, which the government has withheld through TDS throughout the year, is stuck in the system through no fault of your own.
The individual registered users on the platform have grown from 13,51,98,701 on October 13 to 13,52,29,461 by October 15. This growth of 30,760 new users in just two days shows that the tax base is expanding, but the infrastructure to service these taxpayers is clearly not keeping pace.
Many taxpayers report checking the income tax portal multiple times daily, hoping to see their refund status change from “processed” to “refund issued.” The constant checking and uncertainty adds mental stress on top of the financial inconvenience.
The Financial Impact
For middle-class families, tax refunds often represent significant amounts. An average refund of Rs 20,000 to Rs 50,000 is common for salaried individuals who have excess TDS deducted during the year. When multiplied by 1.05 crore pending returns, we are talking about thousands of crores of rupees stuck in the system.
This money could be circulating in the economy, helping families with their expenses, contributing to festival shopping, or being invested for future needs. Instead, it sits in government accounts earning no interest for the taxpayers who are the rightful owners.
The delay is particularly harsh because taxpayers had to pay their taxes on time throughout the year through TDS. When they are owed money back, they expect the same promptness from the department.
What Can Taxpayers Do
Unfortunately, individual taxpayers have limited options when facing such systemic delays. The Income Tax Department’s grievance redressal mechanisms are often slow to respond, and there is no fast-track option for processing refunds.
You can check your refund status on the income tax portal, but beyond that, it is mostly a waiting game. Some taxpayers try filing complaints or contacting their jurisdictional assessing officer, but with over 1 crore cases pending, individual interventions rarely speed things up.
The silver lining, if there is one, is that delayed refunds do earn interest under Section 244A of the Income Tax Act. The interest rate is currently 0.5 percent per month or part thereof, which works out to approximately 6 percent annually. However, this interest only begins accruing after a certain period from the end of the assessment year, and it does not fully compensate for the inconvenience and opportunity cost.
The Bigger Picture
This situation reflects a broader challenge in India’s tax administration. While digitization has made filing returns easier and expanded the tax base significantly, the backend processing systems have not scaled proportionately. The Income Tax Department has invested in user-facing portals and interfaces, but the processing infrastructure appears to be struggling under the load.
The verified but unprocessed returns represent cases where the department has already checked the returns and found them to be in order. These should be the easiest cases to process and close. The fact that they are sitting unprocessed raises questions about system efficiency and resource allocation.
For a country aspiring to be a developed economy, efficient tax administration is not a luxury but a necessity. Taxpayers who comply promptly deserve to receive their refunds without undue delay. The current situation erodes trust in the system and creates unnecessary hardship for millions of families.
Looking Ahead
The coming weeks will be crucial. With Diwali approaching and year-end not far behind, many taxpayers are hoping for faster processing. The department needs to significantly ramp up its processing capacity to clear the backlog before the next filing season begins.
If the current processing rate continues, the backlog will only grow larger as more people file returns for the current assessment year. This could create a cascading effect where delays compound year after year, making the situation increasingly unmanageable.
The Income Tax Department must prioritize clearing these verified returns and issuing refunds to restore taxpayer confidence. Whether this requires additional staff, better technology, or streamlined procedures, the need for action is urgent.
For now, the 1.05 crore taxpayers waiting for their refunds can only hope that the processing speed picks up soon. Their patience is wearing thin, their festival plans are affected, and their faith in the system is being tested with each passing day.
The numbers do not lie – 4,14,489 returns processed in two days against a backlog of 1,05,84,866 is simply not good enough. Indian taxpayers deserve better.
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