Millions of Indian taxpayers are currently facing an unusual delay in receiving their income tax refunds for the Assessment Year (AY) 2025-26. While refunds usually hit bank accounts within 4 to 5 weeks of filing, many citizens have been waiting for over six months this time.
The delay has sparked anxiety across the country, with “Income Tax Refund Not Received” becoming a trending search topic. But this is not just a technical glitch—there are specific, official reasons why the Income Tax Department is taking longer this year.
Here is the complete report on what is happening, why the scrutiny is stricter in 2026, and the immediate steps you need to take to release your money.
Why Are Refunds Delayed in 2026?
Unlike previous years, the Income Tax Department has adopted a “Zero-Error” policy for processing returns. The delays are primarily driven by advanced Artificial Intelligence (AI) software that is now cross-verifying every single claim.
1. The “Nudge” Campaign & Data Mismatch
In December 2025, the Central Board of Direct Taxes (CBDT) launched a massive “Nudge” campaign. This system automatically compares the data you filed in your ITR against the government’s own records in the Annual Information Statement (AIS) and Form 26AS.
If there is even a small difference—for example, if your interest income from a savings account does not match the bank’s report—the system halts your refund. The department is sending SMS and email alerts asking taxpayers to clarify these mismatches before releasing any funds.
2. Stricter Scrutiny on Deductions
This year, the department is heavily scrutinizing deductions claimed under sections like 80C, 80D, and HRA (House Rent Allowance). In the past, many fake claims went unnoticed. Now, if your claims look high compared to your income profile, your return is flagged for manual verification, which takes much longer than the automated process.
3. The “Defective Return” Trap
Many taxpayers have received notices under Section 139(9) for “defective returns.” This happens if you missed mandatory fields or if your tax calculation contradicts the department’s math. Until you respond to this notice on the portal, your refund will remain blocked indefinitely.
The Delhi High Court Intervention
The issue of delayed refunds has become so serious that it recently reached the courts. In a significant judgment in early January 2026, the Delhi High Court pulled up the Income Tax Department for harassing taxpayers with indefinite delays.
In a specific case involving a tech giant, the court expressed shock at an 8-year delay and warned that officers might have to pay penalties from their own pockets if they fail to process valid refunds on time. This judgment has put pressure on officials to speed up the process, but the backlog remains huge.
Common Technical Reasons for Rejection
Sometimes, the government has processed your refund, but it fails to reach your bank. Check these three things immediately:
- Bank Account Validation: Your bank account must be “Validated” on the e-filing portal. If your KYC is pending at the bank, the refund will fail.
- Name Mismatch: The name on your PAN card and your Bank Account must match exactly letter-for-letter.
- Pan-Aadhaar Link: If your PAN and Aadhaar were not linked, your PAN might be inoperative, making it impossible to credit refunds.
What Should You Do Now?
If your status still shows “Under Processing” or “Processed with Refund Due” but no money has arrived, follow these steps:
- Log in to the Portal: Go to the official e-filing website and check the “Pending Actions” tab. Look for any “Worklist” items or notices.
- Check Your Email: Search your inbox (and spam folder) for emails from
incometax.gov.in. They may have sent an “Intimation u/s 143(1)” showing a discrepancy. - Raise a Grievance: If there are no notices and your bank details are correct, submit a grievance on the portal under “Refund not received.”
- Wait for the Intimation: You cannot get a refund until you receive the Section 143(1) intimation order. This confirms that the department has accepted your calculation.
Frequently Asked Questions (FAQs)
Q: How long can the Income Tax Department legally take to send a refund?
A: Legally, the department has time until December 31, 2026, to process returns filed for the Financial Year 2024-25. However, they usually try to do it much faster.
Q: Will I get interest on the delayed refund?
A: Yes. If the department delays your refund, they must pay you simple interest of 0.5% per month on the refund amount, calculated from April 1st of the assessment year.
Q: My status says “Refund Failed.” What does this mean?
A: This usually means your bank account is closed, the IFSC code changed (common in bank mergers), or the account is not validated. You must update your bank details on the portal and click “Refund Re-issue.”
Q: Can I revise my return now if I made a mistake?
A: The deadline to file a belated or revised return for AY 2025-26 was December 31, 2025. Since that date has passed, you generally cannot revise your return unless you receive a specific notice allowing you to do so.
Q: Is there a specific number I can call?
A: Yes, you can call the Income Tax India helpline at 1800-103-0025 or 1800-419-0025 for status updates.