Income Tax Refunds for AY 2024–25 Face Delays Amid Stricter Verification

Income-tax refunds for Assessment Year (AY) 2024–25 are taking longer than usual, even for straightforward salary cases. The delays are being attributed to stricter verification protocols, a growing backlog at the Central Board of Direct Taxes (CBDT) and more rigorous data-matching checks.

The primary reason for slower refunds this year is intensified scrutiny by the CBDT to ensure accuracy and compliance. These measures aim to prevent fraudulent claims but have resulted in longer processing times for taxpayers.

Reasons Behind Slower Refunds

Routine cases are facing delays if discrepancies are detected between the income-tax return and data in AIS or Form 26AS. Even minor mismatches, such as slight differences in TDS credits or reported income, often trigger manual verification.

A backlog at the Centralised Processing Centre (CPC) has compounded the issue, leaving many returns unprocessed despite timely filing. The department is also applying additional checks where refund claims exceed ₹30,000–₹35,000, adding to the slowdown.

Enhanced Scrutiny for Specific Cases

Returns filed by Non-Resident Indians (NRIs) or those reporting capital gains from property transactions are under particular scrutiny this year. These cases often involve multiple income streams, foreign transactions or complex deductions, which require detailed verification.

Capital-gains cases claiming exemptions under sections such as 54 or 54F are more likely to trigger additional checks. The department is being extra cautious where deductions, reimbursements or allowances need validation, even in salary-based returns.

Steps To Speed Up Refund Processing

Taxpayers can take proactive measures to reduce the chances of delays in refund processing. First, reconcile AIS and Form 26AS data before filing to ensure income and TDS credits match exactly, as minor inconsistencies can trigger reviews.

Second, verify that bank account details are pre-validated on the e-filing portal with correct IFSC codes and account holder names. Finally, complete e-verification promptly, as processing begins only after this step is completed.

Read More: Finance Minister Signals Comprehensive Customs Reform.

Conclusion

The delay in income-tax refunds for AY 2024–25 reflects systemic changes aimed at improving compliance and reducing fraudulent claims. While stricter verification and backlog issues have slowed processing, taxpayers can mitigate delays through accurate filing and timely responses.

Enhanced scrutiny for high-value refunds and complex cases underscores the importance of thorough documentation. These measures, though inconvenient, are expected to strengthen the integrity of the tax system in the long run.

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