ITR deadline: As taxpayers await refunds, check new rules, cases that would require mandatory scrutiny
In 2025, the Income Tax Department implemented new regulations that require complete scrutiny of certain ITRs. Under these rules, taxpayers whose cases fall within specific criteria will see their returns closely examined in detail. This might delay their refunds.
- Sep 2, 2025,
- Updated Sep 2, 2025 2:29 PM IST
With just 13 days left for taxpayers to file their Income Tax Returns (ITR), a significant number of returns filed this year are yet to be processed. According to official data, approximately 4.26 crore taxpayers have filed their returns so far, with around 4.05 crore verified. Out of these, the Income Tax Department has processed roughly 2.84 crore returns, leaving about 1.2 crore returns pending.
This delay has created concern among taxpayers expecting timely refunds. Many individuals who filed their returns months ago are still waiting for the department to complete the processing, raising questions about the reasons behind the slowdown. Experts attribute this to a combination of procedural changes and stringent scrutiny measures introduced by the department this year.
New rules and mandatory scrutiny
In 2025, the Income Tax Department implemented new regulations that require complete scrutiny of certain ITRs. Under these rules, taxpayers whose cases fall within specific criteria will see their returns closely examined in detail.
Complete scrutiny entails a comprehensive review of the taxpayer’s entire return. Every element, including income, deductions, exemptions, investments, and financial transactions, is checked against supporting documents to ensure compliance.
Cases subject to mandatory scrutiny
The new scrutiny rules target certain categories of taxpayers:
Survey Cases: Taxpayers whose premises were surveyed under Section 133A (except 2A) after April 1, 2023.
Search and Seizure Cases: Individuals or entities that underwent a search or had documents seized under Sections 132 or 132A between April 1, 2023, and March 31, 2025.
Claim of Exemption after Registration Cancellation: Trusts or institutions whose registration under Sections 12A, 12AB, 10(23C), or 35(1)(ii)/(iii) has been cancelled but still claim exemptions.
Repeated Additions: Cases where additions exceeding ₹50 lakh in metro cities or ₹20 lakh in other regions were made in the first assessment and not rejected on appeal.
Information from Investigating Agencies: Returns flagged based on credible information received from agencies such as the CBI or ED.
Taxpayers in these categories can expect a thorough review of their returns, which may extend processing timelines.
Cases exempt from mandatory scrutiny
Returns filed after receiving a notice under Section 142(1), or those with limited third-party information derived from AIS, TDS-CPC, or SFT systems, are not automatically subjected to complete scrutiny. Instead, they may be selected for assessment through the Computer Assisted Scrutiny Selection (CASS) system.
Advice for taxpayers
Experts advise that if a taxpayer falls under the categories subject to mandatory scrutiny, they cannot avoid receiving a notice under Section 143(2). It is crucial to have all supporting documents ready and respond promptly to avoid further delays or penalties.
ITR status and refund delays
The standard timeline for ITR processing begins only after e-verification. Typically, taxpayers receive refunds within 4-5 weeks after verification. The Income Tax Department’s e-filing portal allows users to track the status of their return and refunds:
Log in to the e-filing portal with PAN/Aadhaar and password.
Navigate to “e-File” and select “Income Tax Returns.”
Click “View Filed Returns” and then “View Details” for the relevant assessment year.
The portal shows whether the return is “Processed,” “Refund Issued,” or “Refund Failure.”
Common reasons for refund delays include:
Incorrect or unvalidated bank account details
Mismatched IFSC code or account name
Discrepancies between ITR information and Form 26AS or AIS
Pending tax demands from previous years, leading to adjustment against the refund
If a refund fails, taxpayers can request reissuance through the portal’s “Refund Reissue Request” service under the “Services” tab.
Taxpayer concerns
Many taxpayers have voiced frustration over delayed processing, even for those who filed early. Complaints have surged on social media, with the department’s official X handle receiving numerous messages from concerned taxpayers seeking clarity on refund timelines.
With the ITR filing deadline fast approaching, authorities are urging taxpayers to ensure e-verification and accurate documentation to avoid last-minute complications. The new scrutiny measures and pending cases indicate that while refunds for many may be delayed, compliance remains a top priority for the Income Tax Department in 2025.
With just 13 days left for taxpayers to file their Income Tax Returns (ITR), a significant number of returns filed this year are yet to be processed. According to official data, approximately 4.26 crore taxpayers have filed their returns so far, with around 4.05 crore verified. Out of these, the Income Tax Department has processed roughly 2.84 crore returns, leaving about 1.2 crore returns pending.
This delay has created concern among taxpayers expecting timely refunds. Many individuals who filed their returns months ago are still waiting for the department to complete the processing, raising questions about the reasons behind the slowdown. Experts attribute this to a combination of procedural changes and stringent scrutiny measures introduced by the department this year.
New rules and mandatory scrutiny
In 2025, the Income Tax Department implemented new regulations that require complete scrutiny of certain ITRs. Under these rules, taxpayers whose cases fall within specific criteria will see their returns closely examined in detail.
Complete scrutiny entails a comprehensive review of the taxpayer’s entire return. Every element, including income, deductions, exemptions, investments, and financial transactions, is checked against supporting documents to ensure compliance.
Cases subject to mandatory scrutiny
The new scrutiny rules target certain categories of taxpayers:
Survey Cases: Taxpayers whose premises were surveyed under Section 133A (except 2A) after April 1, 2023.
Search and Seizure Cases: Individuals or entities that underwent a search or had documents seized under Sections 132 or 132A between April 1, 2023, and March 31, 2025.
Claim of Exemption after Registration Cancellation: Trusts or institutions whose registration under Sections 12A, 12AB, 10(23C), or 35(1)(ii)/(iii) has been cancelled but still claim exemptions.
Repeated Additions: Cases where additions exceeding ₹50 lakh in metro cities or ₹20 lakh in other regions were made in the first assessment and not rejected on appeal.
Information from Investigating Agencies: Returns flagged based on credible information received from agencies such as the CBI or ED.
Taxpayers in these categories can expect a thorough review of their returns, which may extend processing timelines.
Cases exempt from mandatory scrutiny
Returns filed after receiving a notice under Section 142(1), or those with limited third-party information derived from AIS, TDS-CPC, or SFT systems, are not automatically subjected to complete scrutiny. Instead, they may be selected for assessment through the Computer Assisted Scrutiny Selection (CASS) system.
Advice for taxpayers
Experts advise that if a taxpayer falls under the categories subject to mandatory scrutiny, they cannot avoid receiving a notice under Section 143(2). It is crucial to have all supporting documents ready and respond promptly to avoid further delays or penalties.
ITR status and refund delays
The standard timeline for ITR processing begins only after e-verification. Typically, taxpayers receive refunds within 4-5 weeks after verification. The Income Tax Department’s e-filing portal allows users to track the status of their return and refunds:
Log in to the e-filing portal with PAN/Aadhaar and password.
Navigate to “e-File” and select “Income Tax Returns.”
Click “View Filed Returns” and then “View Details” for the relevant assessment year.
The portal shows whether the return is “Processed,” “Refund Issued,” or “Refund Failure.”
Common reasons for refund delays include:
Incorrect or unvalidated bank account details
Mismatched IFSC code or account name
Discrepancies between ITR information and Form 26AS or AIS
Pending tax demands from previous years, leading to adjustment against the refund
If a refund fails, taxpayers can request reissuance through the portal’s “Refund Reissue Request” service under the “Services” tab.
Taxpayer concerns
Many taxpayers have voiced frustration over delayed processing, even for those who filed early. Complaints have surged on social media, with the department’s official X handle receiving numerous messages from concerned taxpayers seeking clarity on refund timelines.
With the ITR filing deadline fast approaching, authorities are urging taxpayers to ensure e-verification and accurate documentation to avoid last-minute complications. The new scrutiny measures and pending cases indicate that while refunds for many may be delayed, compliance remains a top priority for the Income Tax Department in 2025.