Income Tax Refund Still Not Credited? This Shocking Reason Behind The Delay Will Surprise You

New Delhi: If you filed your Income Tax Return (ITR) on or before 16 September 2025 and are expecting a refund, this news is important for you. Many taxpayers are reporting that refunds are delayed this time. The Income Tax Department investigated the issue and found out the real reason.

Fake tax deductions under Old Tax Regime found

The department discovered that many people made wrong claims for tax deductions, mostly under the Old Tax Regime. These include fake medical expenses and fake donations. Using computer systems and AI (Artificial Intelligence), the department found these wrong claims.

Fake Claims Worth Rs 700 Crore Detected

The Income Tax Department caught fake claims worth about Rs 700 crore. Most of these were made by people earning more than Rs 20 lakh annually. Because of this, the refund processing has been slowed down.

A senior official said that many people who made fake claims earlier are repeating the same fraud again this year.

Why is the refund taking time?

Due to the ongoing investigation of these wrong refund claims, the refund process is taking more time than usual. Especially in cases where refund amounts are above Rs 10 lakh, there is more delay. Compared to last year, refunds have been 24 percent less this year.

Till 17 September, the department released Rs 1.60 lakh crore in refunds, while last year it was Rs 2.10 lakh crore.

What action is being taken by the department?

In July, the Income Tax Department began a nationwide investigation against people who filed fake claims and wrong tax deductions.

As a result:

- 30,161 taxpayers declared foreign assets worth Rs 29,208 crore and foreign income of Rs 1,089 crore.

- Taxpayers also withdrew fake claims worth Rs 963 crore.

- Additionally, Rs 409.50 crore extra tax was deposited by them.

Taxpayers are getting notices

The department has started sending notices to those who made wrong claims. The idea is to allow them to correct their tax returns.

A senior officer said that they are also trying to clear the pending refunds as soon as possible.