MM TAX CLUB

In the last few days, many taxpayers have started receiving long-pending income tax refunds. However, more than 24 lakh ITRs are still pending beyond 90 days.

So why does the Income Tax Department delay some refunds while others are credited within hours?

Let us understand how refunds are processed and why they are sometimes kept on hold for a long period.

Whenever we are expecting a refund, we wait eagerly. If it is not credited within a week, we start blaming the income tax portal or the department.

However, in recent times, the department has drastically improved the e-filing portal. In genuine cases, refunds are now issued very quickly. In fact, at MM Tax Club, we have filed more than 100 ITRs where clients received their refunds within 4 hours on the same day. This shows the efficiency of the system.

But on the other hand, many ITRs are not even processed for a month. Even after processing, some refunds are kept on hold for several months.

So why does this happen? Is it partiality?

In reality, this is not partiality. Refund delays can happen due to technical glitches, incomplete information provided by taxpayers, bank validation issues, or sometimes because the department keeps the refund for further verification.

Refund Delayed Due to Taxpayer’s Mistakes

In many cases, refunds are delayed because of issues from the taxpayer’s side.

Common reasons include:

1. ITR filed but not verified.
2. Income details in ITR not matching AIS or Form 26AS.
3. Bank account not validated or validated with restrictions.
4. Choosing the wrong ITR form.

For example, even if you are salaried, ITR-1 may not always apply. If you did crypto trading during the year, ITR-3 may be applicable.

Refund Delayed Due to Technical Glitches

Nowadays, most returns are processed electronically by CPC (Central Processing Centre).

If the information provided does not meet electronic verification criteria, the return may be sidelined and kept on hold.

Practical Case from Our Client

In one case, when the ITR was filed, bank validation was still under process. CPC processed the ITR and generated the refund on the same day, but it was kept on hold due to pending bank validation.

The bank account was validated the next day. However, since the refund was on hold (not failure), we could not request reissue.

After around two months, the status changed from “kept on hold” to “failed.” We then filed a refund reissue request but still did not receive the refund.

Finally, we revised the ITR. After revision, the refund was issued within 10–15 days.

This shows that sometimes the issue is technical and requires corrective action.

Refund Kept on Hold by Department for Verification

In certain cases, refunds are not processed automatically and are transferred to the Assessing Officer for verification.

Situations include:

1. Previous tax demand – Refund is first adjusted against earlier demand.
2. Multiple income sources and TDS entries – Requires reconciliation.
3. High refund amount – Large refunds are carefully verified.
4. Timing – During peak season, officers are overloaded with work.
5. Unusual transactions – For example, mismatch between GST sales and income reported in ITR.

In such cases, the refund may be kept on hold for detailed verification.

If your income tax refund is still pending or showing “kept on hold,” feel free to mention your situation in the comments.

I regularly review such cases and will try to guide you on possible next steps.

You may also comment below:

• How many days your refund has been pending
• Whether your return is processed or not
• If there is any previous tax demand