Even after the December 31 deadline for filing belated income tax returns, a large number of taxpayers are still waiting for their returns to be processed for Assessment Year (AY) 2025–26. Many are also tracking delayed refunds and wondering if something has gone wrong.
According to data available on the Income Tax Department’s website, around 8.80 crore income tax returns have been filed so far for AY 2025–26. Nearly 8.66 crore returns have been verified, and about 8.02 crore returns have already been processed. This leaves around 63 lakh returns that are still under processing, with refunds yet to be issued in many cases.
A pending return after December 31 does not automatically indicate a problem. Under the Income-tax Act, the Centralised Processing Centre (CPC) is allowed up to nine months from the end of the financial year to process returns.
For AY 2025–26, which relates to FY 2024–25, the department has time until December 31, 2026. With over 90% of verified returns already processed, the current backlog remains within the legally permitted timeline.
One key reason for delays this year is the increased use of data analytics and risk-based checks. The tax department now matches return data with information from multiple sources, including AIS, Form 26AS, TDS filings, bank records, mutual fund data and other reporting systems.
Even small mismatches in income, deductions or exemptions can cause a return to be flagged, slowing down processing and refund release.
Another major factor is the CBDT’s “nudge” campaign, launched in December 2025. Under this initiative, taxpayers with mismatches are informed through SMS or email and given time to correct errors by filing revised or updated returns.
Until such corrections are made or differences are accepted, the department has deliberately paused processing to avoid incorrect refunds or future tax demands.
Operational factors also played a role. Several ITR forms and utilities were released later than usual, between June and August, pushing back filing and processing timelines. In addition, increased scrutiny of large or unusual refund claims has resulted in manual verification in some cases.
Taxpayers may receive interest on delayed refunds under Section 244A, subject to conditions. Interest is paid at 0.5% per month if the refund exceeds ₹100 or 10% of total tax paid. For timely returns, interest usually starts from April 1 of the assessment year.
Refund delays in AY 2025–26 are largely due to enhanced compliance checks and data matching, not system failure. Taxpayers should regularly review their AIS and Form 26AS, respond to department alerts and correct discrepancies promptly. In most cases, refunds will be issued once checks are complete.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Published on: Jan 7, 2026, 4:13 PM IST
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