This post has already been read 7 times!
Income Tax Refund Delay 2025 Explained: Causes, Fixes & Latest News (AY 2025–26)
Updated: October 13, 2025 — If your ITR shows “Processed” but the refund hasn’t appeared in your bank, this guide walks you through why that happens, how to check, what to do next, plus case studies, sample emails, and the latest process changes impacting refunds in AY 2025–26.
Published by CMA Knowledge. For official processes, always verify at incometax.gov.in and NSDL/Protean.
At-a-glance: Refund status flow
- Processed — CPC has completed processing and computed refund (if any).
- Refund Issued — refund order sent to bank/Protean for credit transfer.
- Refund Credited — refund deposited into your pre-validated bank account.
- Refund Failed — bank returned the electronic credit due to mismatch/closure/technical error.
Important: “Processed” ≠ “Credited”. Many taxpayers confuse the two — the portal marks the ITR processed before bank-level validation completes.
Latest updates & trends (AY 2025–26)
The Income Tax Dept and CPC Bengaluru continue to refine refund procedures. Below is a short summary of recent changes that most affect refund speed.
| Update (2025) | Impact |
|---|---|
| Real-time bank validation through NPCI mapping | Faster checks when PAN-linked accounts are UPI-enabled; reduces failures for valid accounts. |
| SETR (Simplified Electronic Tax Refund) pilot expansion | Faster refund routing for routine cases; high-risk/refund-abuse cases still flagged for manual checks. |
| Automated cross-checks with Form 26AS/AIS | Mismatches now more likely to cause ‘Refund Held’ flags; reconcile before filing. |
| Heightened scrutiny for large refunds & 80G/NPS claims | Delays possible when donations or NPS contributions are significant relative to income. |
Why refunds get delayed — complete checklist
Below are the most common, recurring reasons refunds are not credited even after the portal shows “Processed”. Each reason includes the specific action you should take.
| Reason | How to fix |
|---|---|
| Bank account not pre-validated | Go to Income Tax e-Filing → Profile → My Bank Accounts → Pre-validate & link to PAN. If your bank doesn’t support pre-validation, upload cancelled cheque as proof (if portal permits) and follow reissue steps. |
| Account closed / IFSC changed after filing | Update the bank details on the portal to an active account and request refund reissue. |
| Name mismatch (PAN vs Bank) | Correct name either with the bank or apply for PAN correction. Small differences (initials vs full name) often cause rejections. |
| Mismatched TDS / Form 26AS / AIS entries | Compare Form 26AS, employer Form 16 and AIS. If mismatched, get proof from deductor and file rectification. |
| Outstanding demand / earlier assessments | Check ‘Pending Actions’ and clear or dispute any demand — outstanding dues can be set-off against refund. |
| Return picked for manual verification | Respond promptly to notices and provide the required documents. |
| High-value refund flagged | Expect extended verification. Provide supporting docs (donation receipts, capital gains proof, TDS certificates) as requested. |
| Technical delay at Protean / Bank | Contact your bank with the CPC refund order reference or contact CPC at the helpdesk (see contact section below). |
Step-by-step: How to check what happened to your refund
- Login to the e-filing portal — incometax.gov.in. Go to My Account → View Returns/Forms to check the refund status for the AY concerned.
- Check Form 26AS/AIS — reconcile TDS, TCS and other credits. Use NSDL’s Form 26AS or the TRACES portal link on the income tax site.
- Confirm bank pre-validation — Profile → My Bank Accounts. Ensure account number and IFSC match bank records exactly (no extra spaces).
- Check mails / portal messages — CPC sends communications when manual verification is required. Also look for any demand notices.
- Use NSDL refund status — NSDL/Protean has a refund tracking page: NSDL Refund Status.
- Raise refund reissue / grievance — If no credit after 30–45 days, use My Account → Service Requests → Refund Reissue (or raise an e-filing grievance).
Common errors taxpayers make (and how to avoid them)
- Assuming “Processed” equals immediate credit — always verify bank transaction or NSDL tracking.
- Not pre-validating bank account after branch merger or name change — always revalidate post bank changes.
- Filing return without reconciling Form 26AS — reconcile before filing or during amended/rectification filings.
- Using joint accounts — refunds are credited only to single-holder, PAN-linked accounts (as per CPC rules).
Case studies — three real-world examples (representative)
Scenario: A taxpayer’s bank branch changed IFSC after a merger. Refund was processed but returned by bank.
Action taken: Taxpayer updated new IFSC in e-filing, raised a Refund Reissue request with a screenshot showing original refund order number. Bank re-credited within 9 business days.
Takeaway: If your branch merged/IFSC changed, update and revalidate immediately.
Scenario: PAN carried “S. K. Verma” while bank record had “Shyam Kumar Verma”. Refund failed twice.
Action taken: Taxpayer asked the bank to accept name variant proof; simultaneously applied for PAN name correction. After PAN update, refund credited on reissue.
Takeaway: Align name spelling/format across PAN and bank. If time-constrained, accept bank’s acceptable alternate name format or correct PAN.
Scenario: TDS credit in Form 26AS was recorded under a different TAN due to employer error, CPC held refund for verification.
Action taken: Taxpayer collected corrected TDS certificate from employer and filed rectification (Section 154/154A process). Refund released in about 20 days post-rectification.
Takeaway: Keep employer and deductor records handy; get corrected TDS certificates when needed.
Practical templates & scripts
Use these templates to contact your bank, CPC helpdesk, or to submit a portal grievance. Copy & paste and edit the fields in bold.
To: <bank-customer-support@example.com>
Subject: Refund not received — ITR AY 2025-26 — PAN ABCDE1234F
Dear Sir/Madam,
My ITR for AY 2025–26 shows “Processed” on Income Tax e-filing portal but refund of Rs. XXX,XXX has not been credited to my account XXXXXXXXXXXX (A/c held at Bank Name, IFSC: XXXXX). CPC/Protean refund order reference is REF12345 (if available).
Kindly check whether any instruction was received for crediting this refund and advise next steps. I have attached the refund order screenshot and bank passbook page.
Regards,
Your Name
Mobile: +91-9XXXXXXXXX
Subject: Refund Reissue Request — AY 2025-26
ITR Acknowledgement No.: ITR12345678
PAN: ABCDE1234F
Refund Amount: Rs. XXX,XXX
Reason for reissue: Bank account IFSC changed / Bank returned refund / Account closed
Documents attached: Bank passbook / Cancelled cheque / Refund order screenshot
Please process refund reissue to the updated validated account.
How interest on delayed refunds works (example)
Note: Interest rules and rates should be confirmed from official Income-tax notifications. The example below shows how to compute interest using a simple monthly rate approach for explanatory purposes only.
Example: Refund amount = ₹20,000. Delay beyond the due date = 4 months. If interest is applied at 0.5% per month (assumed for illustration), calculation is:
For 4 months = 100 × 4 = ₹400.00
Total to be refunded = Refund amount + Interest = 20,000 + 400 = ₹20,400
Important: above is an illustrative calculation. Exact interest rates, computation start date and rounding rules are governed by Section 244A and official notifications. Confirm on incometax.gov.in.
Checklist: Documents to keep ready if CPC asks
- Scanned copy of PAN card
- Bank passbook/cancelled cheque showing account number & IFSC
- Form 26AS / TDS certificates (Form 16/Form 16A)
- Donation receipts / NPS contribution receipts (if applicable)
- Sale deed / capital gains proof (if refund arises from capital gains)
When to escalate: timeline & escalation ladder
Follow this escalation path if the refund is not received despite following the earlier steps:
- Within 0–15 days after Processed: Wait; monitor NSDL refund status and bank account.
- 15–30 days: Double-check bank validation and Form 26AS mismatch issues; contact your bank.
- 30–45 days: Raise ‘Refund Reissue’ request via e-filing Portal → My Account → Service Requests.
- 45–60 days: If no resolution, send email to orm@cpc.incometax.gov.in with refund order screenshot and grievance reference.
- Beyond 60 days: Consider contacting the jurisdictional Assessing Officer (AO) or consult a tax professional for RTI / legal steps if necessary.
Official contacts & helpful links
https://www.incometax.gov.in
https://tin.tin.nsdl.com/oltas/refund-status-pan.html
orm@cpc.incometax.gov.in
1800 103 0025 / 1800 419 0025 / 080-61464700
Frequently Asked Questions (expanded)
Q: My refund status says ‘Refund Issued’ — when will it reflect in bank?
Q: Will refund be credited to joint accounts or minor accounts?
Q: I received a notice after refund was processed — what should I do?
Final words — practical checklist
- Always pre-validate bank account after filing and after any bank changes.
- Reconcile Form 26AS before filing; keep employer/deductor proofs handy.
- Document every portal request, ticket number, email and chats with bank/ITD — they help in escalation.
- Use the templates above to speed up communication.
