Archive · 25 Jan 2026
Taxpayers await refunds as delays persist
Many people in India are waiting for their tax refunds, which are payments the government owes them when they've paid too much tax.
The government is taking a long time to give this money back, and some people think it's not fair because the interest they earn on their refunds is much lower than the interest they have to pay if they owe the government money.
The government is also checking tax returns more carefully, which is causing more delays.
Some people are hoping the government will change the rules to make things fairer and faster.
Around 50 lakh taxpayers are awaiting income tax refunds for AY 2025–26.
Current interest rate on unpaid taxes is 12% per annum, while refund interest is 6% per annum.
Refund delays are attributed to enhanced backend checks and increased scrutiny.
Taxpayers argue that the current interest rate structure is unfair and favors the government.
Budget 2026 is seen as an opportunity to rationalize interest rates and restore taxpayer confidence.
- Who
- Taxpayers and tax experts
- What
- Demand for equal interest rates on income tax refunds and unpaid tax dues, delays in refunds
- When
- Approaching Budget 2026, current financial year
- Where
- India
- Why
- To address the imbalance in current interest rules, ensure fairness for taxpayers, and due to procedural delays and increased scrutiny
- Number of taxpayers affected
- 50 lakh
- Current interest rate on unpaid taxes
- 12% per annum
- Current interest rate on refunds
- 6% per annum
- Assessment year with delays
- AY 2025–26
- Reasons for refund delays
- Enhanced backend checks, verification of AIS and TIS data, increased scrutiny
- Total refunds in FY24
- Rs 2.62 lakh crore
- Total refunds in FY23
- Rs 2.40 lakh crore
- Registered users as of January 24
- 136.7 million
- Income tax returns filed
- 88.2 million
- Income tax returns verified
- 87 million
- Processed ITRs for AY 2025-26
- 81.8 million
- Unprocessed returns for AY 2025-26
- 6.1 million
Sources
Interest on refunds at par with interest on unpaid taxes: Taxpayers’ key demand in Budget 2026
Budget 2026 Expectations Live Updates: Govt should launch National Mission on Rental Housing, says CREDAI
Direct tax refunds fall 17%, as tax revenues falter