Over the past few days, taxpayers across the country have been anxiously refreshing their inboxes, closely watching emails and SMS alerts from the Income Tax Department. The reason: income tax refunds for many have been stalled due to “discrepancies” in their ITR filings.
Social media is filled with complaints and confusion, with taxpayers questioning why these issues were flagged so late. The timing has only added to the stress, as the alerts have arrived just days before the December 31, 2025 deadline to revise returns. Accountants, salaried professionals and small business owners are now carefully rechecking Form 26AS, TDS details and deductions, worried that even a small error could delay or derail their refunds.
With demands for an extension growing louder, taxpayers remain on edge, hoping the risk management alerts are minor and not the start of a prolonged refund delay.
How Long Could Refunds Be Delayed?
Once a return is flagged under risk management, delays are almost inevitable. Suraj Singh, Founder of SD Singh and Associates, says the waiting period can range from a few weeks to several months, with no fixed timeline.
In cases where discrepancies are found, the tax department may issue a clarification notice. Refunds are released only after document-based verification or scrutiny is completed, making the wait especially stressful for those tracking their bank balances closely.
Common Reasons Refunds Get Stuck
- Mismatch between income reported and Form 26AS, AIS or TIS
- Non-disclosure of capital gains, F&O trades, ESOPs or foreign income/assets
- Inflated or doubtful deductions such as HRA, insurance or donations
- Failure to respond to compliance portal notices or intimations
- Sale of property not reported under capital gains
- High credit card spends, asset purchases or foreign expenses without matching income disclosure
December 31 Deadline and What’s at Stake
The deadline to file a revised ITR is December 31, 2025. Missing this date leaves taxpayers with only the ITR-U option, which comes with additional tax, interest and penalties. Worse, ITR-U does not allow changes to refund claims, meaning any legitimate refund could be lost permanently.
Even if no action is taken, the original return may still be processed—but the risk remains. The tax department can issue a notice under Section 133(6) seeking verification, and an unsatisfactory response could lead to scrutiny under Section 147.
The message is clear: double-check every entry, deduction and TDS detail now. A little caution today can prevent a refund nightmare tomorrow.