Don’t Expect Quick ITR Refunds This Year — Here’s the Real Reason

If you're waiting for your income tax refund, brace yourself for a delay this year! Taxpayers may see their much-awaited refunds arrive later than usual—and the reasons might frustrate you. Here is a detailed overview as to why the ITR refunds can be delayed this year. 

Why Are Refunds Delayed?
While the filing deadline for non-audit cases has already been extended to September 15, 2025, the real trouble lies elsewhere.
As of July 4, the ITR-2 and ITR-3 utilities aren’t even live yet on the Income Tax Department’s e-filing portal. These forms are essential for lakhs of taxpayers with capital gains, multiple income sources, or business income.
According to the experts, the delay is mainly due to ongoing technical upgrades to backend systems along with some overhauling of structural changes emanating from the Finance Act of 2024. These changes pave the way for delay in ITR refunds. 

Filing Season Started Late
This year’s ITR filing process began nearly a month late in late May. Over 75 lakh ITRs have been filed so far and around 71.1 lakh have been e-verified but the processing status is no longer visible on the department’s website. Refunds will only be issued after reviewing past records, making it clear that delays could impact even the most diligent taxpayers.

Refunds Stuck? 
According to tax professionals, the backend upgrades on the Income Tax portal are slowing things down. The department is also reportedly conducting detailed scrutiny of older returns to curb fraudulent claims.

Refund Interest? Don’t Get Your Hopes Up
Even worse, the interest paid on delayed refunds is a measly 0.5% per month—and only for those who overpaid more than 110% of their actual liability.
Those who paid between 100–110% get no interest at all. And whatever interest you do get is taxable as ‘income from other sources’, making it even less attractive.

What Should Taxpayers Do Now?
Experts advise taxpayers to: keep checking for the release of ITR-2 and ITR-3 utilities. File as soon as forms go live. Ensure prompt e-verification to avoid further delays. Even though there’s no official confirmation of refund delays yet, the writing is on the wall: if you’re using ITR-2 or ITR-3, your refund may take longer this year.

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