Why Large Tax Refunds Are Slowing Down As Scrutiny Tightens

High-value income-tax refunds are taking longer to reach taxpayers this year, according to a recent report by the Times of India. The Central Board of Direct Taxes (CBDT) has acknowledged that several big claims are currently parked for additional checks, as the department works through cases that its internal systems have flagged for possible mismatches or suspicious deduction patterns.

What’s Holding Up These Refunds

Officials say that while routine refunds continue to move without interruption, the larger and more complex ones are being examined more closely. Much of this delay stems from red flags raised by the department’s data-matching tools, which compare information from employers, banks, investment platforms, and other third-party sources. When a return shows unusually high deductions, inconsistent disclosures, or refund figures that appear disproportionate to reported income, the system automatically marks it for manual verification.

Data shared publicly shows that refund outflows between early April and November 10 are lower than they were during the same window last year, underscoring how widespread this scrutiny has become. In several cases, the department has also encountered errors that taxpayers made inadvertently, missing schedules, inconsistencies in tax deducted at source (TDS) details, or deductions claimed without proper supporting information. All of this slows down the final approval process.

What The Department Says. And What Taxpayers Can Do

CBDT Chairman Ravi Agrawal has said that legitimate refunds should be cleared by the end of November or, in the worst case, by December. He added that the department has already written to taxpayers whose filings require correction, asking them to submit revised returns. Those who respond quickly are likely to see faster movement on their refunds.

For individuals waiting on sizeable amounts, the most practical step is to recheck the filed return for gaps, especially deduction claims, interest income details, capital-gains entries, and bank information. Any slip-up in the return, a figure typed incorrectly, a deduction claimed without proof handy, or a schedule left blank can pull a file into the scrutiny basket and slow down the refund. Once that happens, the department usually takes its time going through every detail before clearing the payment.

A Shift Toward Tighter Compliance

While the holdup may feel frustrating to those waiting for sizable refunds, officials say the broader intention is to make sure the system isn’t taken advantage of. The tax department has been trying to plug loopholes that previously allowed inflated or unsupported claims to slip through. As these checks become more rigorous, they hope fewer questionable refunds will get processed in the first place.

For taxpayers, this means the process might feel a bit heavier this year. Anyone expecting a large amount back may have to stay patient, answer any queries that come from the department, and be ready with paperwork if they’re asked to clarify something. The new approach is still settling in, and the hope is that once it stabilises, refunds that are clean and straightforward will move faster than they do now.