Income tax refund running late? Here’s how long it may take and what you can do

Check refund status online first

Every year several taxpayers wait anxiously for their income tax refunds to get credited to their bank account. For many, the refund is not just a financial formality but a crucial cash flow component especially for those who have paid excess taxes through TDS, advance tax or self-assessment tax. But what happens when the refund doesn’t arrive on time? How long can the Income Tax Department legally take and what are your rights as a taxpayer?

Sujit Bangar, founder of Tax Buddy, explains, "The Income Tax Department follows the timelines prescribed under Section 143(1) of the Income Tax Act, which allows up to nine months from the end of the financial year in which the return is filed to process it. Many taxpayers are not aware of this provision and expect refunds immediately after filing. However, the process is fully automated with no manual intervention, and while refunds may get issued earlier in some cases, the Department is obligated only to process returns and issue refunds within the statutory timeframe."

This means that for returns filed in September 2025, the department has time until December 31, 2025 to process the return and issue a refund.

Recently, the chairman of Central Board of Direct Taxes (CBDT), Ravi Agrawal, clarified that many ITRs appear unusual, and that the department is carefully checking any errors in filing. He said 40 percent of more appeals have been settled this year. Agrawal said that the remaining refunds should be released by the end of this month or by December.

Balwant Jain, a Mumbai-based tax expert points out, "There is a time limit of nine months for processing the ITR but no time limit for issue of refund. There is no provision under the law but the courts have held that it cannot be held back beyond reasonable time without sufficient reasons. In case you do not receive your refund, you can file a writ petition with high court requesting the court to direct the department issue the refund."

Why your refund may be delayed

Even though the system is largely automated, delays can occur due to issues at the taxpayer’s end or procedural checks. Before raising an alarm, taxpayers should verify whether any of the following apply:

• Bank account not validated for refund receipt
• E-verification pending
• Action required under the “Worklist” tab, such as responding to notices
• Defective return filed under Section 139(9)
• Outstanding demand from previous assessment years, which may lead to adjustment
• Mismatch in TDS or tax credit, requiring backend verification

The good news is that taxpayers are compensated for delays. Refund interest is governed by Section 244A of the Income Tax Act, which clearly states that interest of 0.5% per month (6% per annum) is payable on refunds. If the income tax return was filed on or before the due date the interest is given from the start of the financial year otherwise interest depends on the period when the return was filed and refund was received.

What taxpayers should do to speed up their refund

If your refund is delayed, here are the steps recommended by tax experts:

• Check refund/ITR status on the portal
• Verify bank account details for refund
• Respond promptly to any notices or requests for confirmation
• Raise a grievance under the e-Nivaran section
• Contact the CPC helpline for follow-ups
• Escalate through a writ petition if the refund is unreasonably withheld even after processing