As tax season moves along, a number of taxpayers have already gotten their income tax refunds issued, but many are still awaiting theirs. If you haven’t received your refund yet, you are among them. There might be some technical or procedural reasons behind the delay.

Technical Glitches in Filing Tools
This year, the Income Tax Department rolled out updated offline Excel utilities for filing ITR-2 and ITR-3-mostly used by salaried individuals with capital gains or those with income from business or profession. Some early technical glitches with these tools made tax professionals hesitant to start filing for their clients, resulting in possible delays in processing and hence refunds for taxpayers who use these forms.

On the other hand, taxpayers using ITR-1 (Sahaj) and ITR-4 (Sugam) enjoy faster refunds. These are simpler forms mostly used by salaried individuals, pensioners, and small business owners. These forms have been working smoothly and being processed fast.

Frequent Reasons That Might Delay Your Tax Refund:

If you filled out your taxes correctly and on time, there can still be several reasons for your refund to be on hold.

1. Claiming Deduction Incorrectly
Should you have claimed deductions (for example House Rent Allowance (HRA), premiums paid towards life or health insurance, and interest on loans taken for educational purposes)without having documents that show proof of it, the Income Tax Department may place your refund on hold and issue a notice to you for more information. Many deductions can create red flags that could warrant high scrutiny of your return.

2. Returns Do Not Match ITR and AIS/Form 26AS
It is important that your Income Tax Returns (ITR) match with your annual information statement (AIS) and Form 26AS. The ITR, AIS, and Form 26AS contain finance to your account from TDS deductions, interest income, and any purchases that were made that were in high-value. If your ITR does not match these forms, the return may be spot flagged and your refund put on hold pending corrections.

3. Incorrect or Unverified Bank Details
Your refund will only be processed to a pre-validated bank account linked to your PAN on the income tax portal. If you provide incorrect account number, IFSC, or your bank account is not approved to the full or not verified at all, your refund will not get credited. If the PAN details and Bank account details do not match (for example: there is a join account, or there is a misspelling in your name), you will also have a delay.

4. Refund Issued but Not Received
In certain instances, the refund has been released from the department, even if it has not physically reached the taxpayer’s account. This can happen if the bank account was de-activated, or the IFSC was on account that merged with another bank and the IFSC was updated but not updated on the I-T portal as it was done after the filing of the return (common with PSUs) or there may be incomplete KYC. In these instances, you have to log into the I-T portal and request a re-issue of the refund.

5. Set Off Against Previous Tax Liability
If you have an outstanding liability from previous years, the department may set off your refund against the outstanding tax due. You will probably receive a notification by email or by SMS, but it could still be a shock if you were not expecting it.

6. Return Under Scrutiny
And finally, if your return is under scrutiny or has been selected for assessment, for example, due to a high value transaction, excessive deductions, or for any reason that warrants detailed scrutiny, your refund will be suspended until the scrutiny is completed. This may take a long time to complete.

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What You Should Do
If you are concerned about your refund, check your filing details on the income tax portal, confirm your bank account is linked correctly, search for notices, and look for any mismatch alerts. If you receive a letter from the department, you need to respond to it as quickly as you can.

Patience is certainly a virtue—but it may help being informed and being pro-active in making sure your refund will make its way into your account sooner than later.

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