**📰 Over 75 Lakh ITRs Filed But Refunds Could Be Slower This Year, Warn ExpertsAaerm Law Associates – July 7, 2025
The Income Tax Department confirms that more than 75 lakh income tax returns (ITRs) have been filed since the late‑May start of the filing season. Around 71.1 lakh of these have been e‑verified. However, experts caution that taxpayers should expect slower refund processing this year due to multiple interlinked factors.
🔍 1. Delay in ITR‑2 & ITR‑3 Utility Release
As of July 4, 2025, ITR‑2 and ITR‑3 utilities were not yet live on the Income Tax Department’s e‑filing portal—a major roadblock for those with capital gains, business income, rental income, or multiple sources of income. This delay has significantly disrupted the filing timeline.
- Impact: Taxpayers needing ITR‑2/3 have been unable to file or e‑verify. Consequently, even those with simple returns face constrained refund workflows due to queue buildup.
2. Late Start to Filing Season
Traditionally kick‑off in early May, this year’s filing window began nearly a month late, only in late May. This compresses the processing window before the deadline and causes a backlog at the Central Processing Centre (CPC).
3. Rigorous Backend Scrutiny & System Upgrades
Experts highlight the following backend factors slowing down refunds:
- Review of past returns and assessments — The department is scrutinizing earlier years before permitting current refunds. Officials have been instructed to hold refunds if previous filings are unresolved.
- Technical Upgrades — Portal infrastructure is being revamped to comply with the Finance Act 2024 and includes enhanced AI/data‑matching algorithms.
- Complexity of ITR‑2 / ITR‑3 — Returns with multiple components are experiencing processing slowdowns—around 59% drop in ITR‑2 growth, and 37% drop in ITR‑3 year‑on‑year.
4. Lack of Real‑Time Transparency
Taxpayers have noted a troubling feature: the Income Tax Department’s portal no longer displays processed ITR counts. Previously present under verified returns, this section is now missing, exacerbating anxiety. Tax consultants are urging clearer communication.
5. Policy Changes & Refund Interest Dynamics
Two important policy updates shape the current situation:
- Extended Filing Deadline: CBDT pushed the ITR filing deadline from July 31 to September 15, 2025, acknowledging the delay in form availability.
- Refund Interest Implications: Section 244A interest (0.5% per month) applies only if excess tax payment exceeds 110% of liability. Due to the extended deadline, eligible taxpayers may gain ~33% more interest. However, this interest is taxable and not a windfall.
6. Taxpayer Guidance from Experts
Based on prevailing conditions, tax experts recommend:
- Act quickly once ITR‑2/3 are live: File and e‑verify without delay.
- Ensure full disclosure & compliance: Accurate details across years reduce scrutiny risk.
- Regularly monitor the e‑filing portal: Check status updates or notices, given that backend metrics are missing.
- Track assessment notices from prior years: Unresolved scrutiny could block fresh refunds. Experts recommend swift resolution.
- File grievances if stuck: Many taxpayers report long waits and automated replies; some have obtained resolution only via persistent follow‑up.
7. What This Means for You
| Category of Taxpayer | Expected Outcome |
|---|---|
| ITR‑1 (salaried) | Moderate delays due to backlog, but simpler filings should proceed smoother. |
| ITR‑2 / ITR‑3 (multi‑source/investment/business) | Expect longer waits; filing promptly helps skip the worst of the clog. |
| Refund Claimants | Delays are likely—from days to several weeks/months. Interest may accrue but is taxable. |
| Previous Pending Assessments | Those with unresolved past returns may experience compounded delays or hold-ups. |
✅ Action Plan for Taxpayers
- Watch the e‑filing portal for ITR‑2/3 utilities and file immediately.
- E‑verify without delay.
- Keep previous tax filings and bank details updated.
- Monitor for notices, grievance status, and updates.
- Consult a tax professional promptly for any replies to previous assessments.
🔚 Final Thoughts
This year’s ITR season presents unprecedented delays, driven by late form rollout, backend system overhauls, and tighter fraud scrutiny. Nevertheless, careful preparation—prompt filing, complete documentation, and proactive monitoring—can help mitigate these challenges. While interest offered compensates in part, the goal remains timely refunds, and taxpayers are advised to stay vigilant.
