Over 75 lakh ITRs filed but refunds could be slower this year, warn experts

The ongoing delays in the release of ITR-2 and ITR-3 utilities have added a layer of complexity to this year’s income tax return (ITR) filing season. As of July 4, 2025, these essential forms have not gone live on the e-filing portal, affecting individuals with multifaceted financial profiles. This delay is expected to impede timely tax return filings and subsequently delay refund processing for many taxpayers. Such issues exacerbate the challenges stemming from the late start of the filing season.

A senior tax consultant expressed concerns over the lack of transparency from the Income Tax Department, noting that the absence of official updates is causing considerable confusion and anxiety among taxpayers. “The IT department should establish a clear and transparent communication process so taxpayers can understand why their refunds are held up and when they can expect resolution,” he stated. This lack of communication is particularly troubling in a year where clarity is needed more than ever.

The filing season, which began at the end of May, started nearly a month later than usual, compressing the time available for taxpayers to meet the traditional July 31 deadline. This has resulted in a condensed timeline for processing, further complicating the situation for those awaiting refunds.

Tax professionals are cautioning filers about the possible impacts of these delays. According to CA Suresh Surana, the Income Tax Department has implemented a rigorous verification strategy to curb fraudulent claims. “The department is reviewing past assessment records and earlier ITRs before issuing new refunds. Tax officials have been instructed to halt new refunds if scrutiny is pending or assessments from prior years remain open,” he explained. This meticulous approach, while necessary, has unfortunately slowed down the refund process for many.

While this stringent approach is intended to eliminate fraudulent claims, it has inadvertently created barriers for honest taxpayers who have consistently filed correctly. Tax experts recommend that taxpayers ensure their disclosures are accurate and stay informed through the e-filing portal for updates.

The absence of processed ITR data on the department’s website has left taxpayers with little information about the progress of backend operations, further fuelling uncertainty. Previously, this data provided insights into the department’s processing efficiency, a feature currently omitted from the website.

Tax experts advise individuals, particularly those waiting for ITR-2 and ITR-3 forms, to file and e-verify their returns promptly once the forms are available to avoid further processing delays. Filing early can help mitigate some of the delays caused by the current backlog.

More than 75 lakh returns have been filed since the end of May, with about 71.1 lakh returns e-verified, according to the Income Tax Department’s website. However, the combination of delayed utilities and backend verifications suggests longer waits for refunds, particularly affecting those with more complex tax profiles. Taxpayers are encouraged to remain proactive, ensuring all details are correct to facilitate a smoother process.