New Delhi: This year, lakhs of taxpayers are facing delays in receiving their income tax refunds, raising concerns across the country. The Central Board of Direct Taxes (CBDT), led by Chairman Ravi Agrawal, explained that the department is currently reviewing certain refund claims, particularly those that are high-value or flagged by the system for additional scrutiny.
Agrawal said that while most low-value refunds have already been processed, a portion of claims is under re-examination. Some taxpayers had claimed incorrect or excessive deductions, and these cases need verification before refunds can be released. The department says this enhanced scrutiny is part of a routine compliance check to prevent wrongful payouts and maintain the integrity of the tax system.
Refunds Expected Soon
Despite the delays, the CBDT chief assured taxpayers that pending refunds are likely to be cleared by the end of this month or by December. Efforts are being made to complete the verification cycle quickly so that genuine refund claims are not held up unnecessarily.
“Low-value refunds are being released, and the remaining refunds should be cleared soon. This is a continuous process to ensure only genuine claims are paid,” Agrawal told reporters after inaugurating a taxpayers’ lounge at the India International Trade Fair (IITF).
Interest on Delayed Refunds
Taxpayers can be assured that interest is payable on delayed refunds. Under Section 244A of the Income Tax Act, interest is calculated at 6 percent per annum from the date the refund becomes due until it is issued, as long as the delay is not due to errors or missing information from the taxpayer.
Section 437(1) allows 0.5 percent interest per month on the delayed refund. This interest is automatically added to the refund; taxpayers do not need to file a separate claim.
Errors in filing or mismatched information can still lead to delays, but for genuine claims, the law ensures taxpayers are compensated for the wait. The department’s enhanced scrutiny this year highlights its risk-based monitoring, especially for high-value refunds, ensuring compliance while safeguarding taxpayer interests.
