Income Tax Refund Not Received 2026 – Why ITR Refunds Are Delayed and What to Do

A delayed refund does not necessarily mean something is wrong with your filing, but it does mean something in it triggered additional review. Understanding why it is held and what you can do about it is the quickest way to get the money moving.

This page covers:

• What an income tax refund is and the normal processing timeline
• Why AY 2025-26 refunds are specifically delayed
• Six common reasons your return may be under investigation
• How to check your refund status
• How to respond to notices or intimations
• How to raise a refund reissue request
• What the Income Tax Department's processing deadline means for you

An income tax refund is the amount returned to you when you have paid more tax during the year than your actual liability. This happens most commonly through excess TDS deducted by your employer or bank, or through deductions and exemptions that reduce your tax liability below what was paid. Refunds are processed only after your ITR is filed and verified by the Income Tax Department.

The standard timeline once you file online and complete e-verification is 4 to 5 weeks. In practice, simpler returns — straightforward salary income with no unusual claims — often process within a couple of weeks. Returns with higher refund amounts, capital gains, or figures that differ significantly from Form 26AS data take longer.

As of August 2025, less than 40% of filed returns for AY 2025-26 had been processed — an unusually low figure that reflects a deliberate shift in how the department handles compliance checks this year. Several factors have combined:

• AI-driven risk management. The department has deployed enhanced artificial intelligence tools to identify returns that merit additional scrutiny before a refund is issued. This catches more genuine discrepancies — but also means more routine returns get flagged for secondary review than in previous years.
• Data matching with AIS and Form 26AS. Every figure in your return is now cross-checked against the Annual Information Statement (AIS) and Form 26AS, which aggregate information from banks, mutual fund companies, property registrars, and other reporting entities. Even minor discrepancies — a dividend amount that differs by a few hundred rupees, or an interest figure rounded differently — can trigger a hold.
• High-value claim scrutiny. Large refund claims, significant capital gains, or deductions that appear disproportionate to income are subject to mandatory manual review before processing. This is not a penalty — it is a compliance check — but it does add weeks to the timeline.
• New tax reform implementation. Updates to tax laws and backend system changes have added processing overhead that was not present in earlier assessment years.

1. Visit the official Income Tax Department website.
2. Log in with your PAN and password.
3. Navigate to 'View Returns/ Forms' and select 'Income Tax Returns'.
4. Your filed returns appear with their current processing status.
5. Alternatively, use the 'Know Your Refund Status' tool under the e-Filing portal using your PAN and Assessment Year.

If the status shows "Refund Issued," check your pre-validated bank account, it should arrive within 3 to 5 working days. If it shows "Under Processing," no action is required yet. If it shows "Defective Return" or "Notice Issued," you need to respond promptly.

1. Log in to the official e-filing portal.
2. Check the 'Pending Actions' section for any notices or intimations.
3. Read the notice carefully — it will specify the issue (mismatch, demand, defective return) and the response deadline.
4. Respond within the stated deadline. Late responses can lead to ex-parte assessments.
5. If you disagree with the department's position, file an online response explaining your position with supporting documents.
6. Consult a tax professional if the notice involves a significant amount or complex issue.

If your refund was issued but not received — for example, because the bank account details were incorrect — you can raise a reissue request:

1. Log in to the Income Tax e-filing portal.
2. Go to 'Services' > 'Refund Reissue'.
3. Select the relevant assessment year.
4. Verify and update your bank account details if needed.
5. Submit the reissue request — the department will reprocess and credit the refund to the updated account.

The Income Tax Department has a statutory deadline of 31 December 2026 to complete processing of AY 2025-26 returns. In practice, the bulk of straightforward returns will be processed well before this, but returns flagged for scrutiny or manual review may take until later in the year. If your return is not processed by the deadline and you are owed a refund, the department is liable to pay interest on the delayed amount under Section 244A of the Income Tax Act.

A delayed ITR refund is frustrating, but it rarely requires dramatic action — most are resolved through the normal processing cycle. Keeping your bank account pre-validated and responding promptly to any notices are the two most important steps you can take. While you wait, if you are planning to finance a home purchase, Bajaj Finance offers home loans from 7.25% p.a.* with amounts up to Rs. 15 Crore* and tenures up to 32 years. Check your eligibility today.