Income Tax Refund Update: 95% refunds have been processed, delay only in some cases – know the real reason

There is news of relief for taxpayers worried about income tax refund. Income Tax Department has clarified that Processing of more than 95% of refund cases has been completed in the financial year 2025-26.. Only a few selected cases have been stopped at present, which require additional investigation.

According to CBDT, reduction in refunds does not mean that the department is withholding taxpayers’ money. The changes in the tax system and the increasing popularity of the new tax regime are the major reasons behind this.

Why were the refunds less than last year?

Total income tax refund till January 11 ₹3.11 lakh crore Which is approximately ₹ 3.75 lakh crore in the same period last year. 17% less Is.

Senior officials say that this reduction is not the result of administrative delay, but a better system of tax deduction, due to which the cases of additional tax deduction have reduced.

Why are some refunds still pending?

Income Tax Department now Automated Data Analytics Is using. In this process, mismatch was found in income, TDS or other details in some returns.

In such cases, taxpayers were asked to correct the returns or provide additional information before refunds were issued. The department also launched a special campaign for this, due to which in the last two years Additional tax collection of ₹9,640 crore Happened.

Process changed due to analytics based investigation

Whereas earlier refunds were issued quickly, now payment is made only after data matching. According to officials, only those cases where further investigation is necessary have been put on hold.

This ensures that refunds are not issued based on incorrect information.

Refund also reduced due to change in TDS rules

In the last few years the government TDS rules more rational has made. This has reduced the problem of excessive tax being deducted during the year.

When tax is deducted in the correct amount, there is no need for refund after filing the return.

Growing trend towards new tax regime

From ITR-1 to ITR-4 filers 88% taxpayers have chosen the new tax regime. Deductions and exemptions are not available in this, but the tax slab is low and the process is easy.

In the old regime, due to higher deductions, the chances of refund were higher, whereas in the new regime, the tax is already balanced.

Refunds have not been stopped, they are being issued only after investigation.

The Income Tax Department clearly says that there is no hindrance in the refund process. Most of the taxpayers have received their money, and those whose refunds are withheld are only due to technical or investigation related reasons.

Refund will be issued automatically if the information given in the return is correct.