ITR Refund Status: Know Why Your Income Tax Refund is Delayed This Year: AI Checks, Fake Claims, and Extra Scrutiny

ITR Refund Status: Know Why Your Income Tax Refund is Delayed This Year: AI Checks, Fake Claims, and Extra Scrutiny

New Delhi: If you’re still waiting for your Income Tax Return (ITR) refund for FY 2024–25, you’re not alone. Refunds are taking longer than usual this year as the Income Tax Department is following a tight verification process to reduce false claims.

Income Tax department under the Finance Ministry is focused on individuals with incomes above ₹20 lakh who opted for the old tax regime. Officials have flagged a surge in false exemption claims — including fabricated medical bills and fictitious donations to political and religious organisations — with suspicious claims estimated at nearly ₹700 crore.

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Refunds above ₹10 lakh are facing more delays than usual, as extra risk checks are carried out at Central Processing Centres. “Many taxpayers, mostly repeat offenders with incomes over ₹20 lakh, were found to be claiming wrongful refunds. This verification is taking additional time,” a senior official told The Economic Times.

AI and Data Analytics in Play

To speed up the detection of false claims, the tax department has rolled out computerized verification systems powered by artificial intelligence and data analytics. These systems flag mismatches in declarations, with follow-up notices sent to taxpayers for corrections.

Since July, authorities have also expanded checks on intermediaries assisting individuals in filing inflated exemptions. The compliance drive is already showing results:

• Taxpayers have voluntarily withdrawn claims worth ₹963 crore.
• Additional taxes of ₹409.50 crore have been paid.
• 30,161 taxpayers disclosed foreign assets worth ₹29,208 crore and foreign income of ₹1,089 crore.

Refunds Slower, but Compliance Stronger

Latest data shows refunds dropped 24% year-on-year, with ₹1.60 lakh crore disbursed by September 17 compared to ₹2.10 lakh crore in 2024.

While the delays may be frustrating for taxpayers, but refunds are likely to be processed without major delays.