Want A Bigger 2025 Tax Refund? Follow These 6 Tips To Maximize Your Return And Interest

Filing of Income Tax Returns (ITRs) for the financial year 2024-25 (assessment year 2025-26) is gradually gaining pace. As of June 18, over 35 lakh returns have been filed and more than 32 lakh verified, though this still accounts for less than 4% of the expected total - indicating that most taxpayers are yet to file in the coming weeks.

In a move to ease pressure on taxpayers, the deadline for filing Income Tax Returns has been extended to September 15, 2025. However, "this extension impacts the government more, as it delays tax collection. Taxpayers also get less time to revise their returns, with the revision deadline set for December 31," says tax expert Sharad Kohli.

With more time on hand, taxpayers can now plan better and file more efficiently. Here are six key tips from CA Arpit Yadav, tax expert and co-founder of Two Tax, to help you maximize your refund and avoid common filing mistakes:

1. File Early And Accurately

Timely and correct filing helps prevent delays. Even minor mistakes in PAN, Aadhaar, bank details, or email ID can can cause processing issues. lead to issues. Early and accurate submission helps ensure faster refunds.

2. Earn More Interest On Your Refund

If your refund is delayed, the Income Tax Department pays 0.5% interest per month on the pending amount. With the deadline now pushed back, this interest can accumulate to a larger sum, than in previous years. However, keep in mind that this interest is taxable, so factor it into your future returns.

3. Claim All Eligible Deductions

To reduce your overall tax liability, it's important to go beyond just the standard deductions. Strategic planning can help you claim a wide range of deductions available under various sections of the Income Tax Act.

Under Section 80C, you can claim deductions for investments such as Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), life insurance premiums, and tuition fees. Section 80D allows you to claim deductions on health insurance premiums for yourself and your family.

If you're living in a rented house, you may also be eligible for House Rent Allowance (HRA) deductions. Additionally, before filing, it's wise to evaluate whether the old tax regime or the new tax regime offers you better benefits based on your income and deductions. Making an informed choice can help you save significantly.

4. Track Your Refund Status

Regularly checking your refund status can help you spot and address any issues early. You can track your refund through the official income tax e-filing portal or use the NSDL "Know Your Refund Status" tool. Keeping an eye on your refund progress ensures that any discrepancies or delays can be resolved promptly, leading to faster and smoother processing.

5. Be Careful About Cyber Fraud

Taxpayers should stay alert to cyber frauds, especially during the ITR season. The Income Tax Department never sends refund links via WhatsApp, SMS, or random emails. If you receive any such suspicious messages, do not click on the links, as they may lead to phishing websites or malware.

Instead, report these incidents immediately by visiting cybercrime.gov.in or by calling the helpline number 1930. Staying vigilant can protect your personal and financial information from being misused.

6. Choose The Right ITR Form

It's important to select the correct ITR (Income Tax Return) form while filing your return. Using the wrong form can lead to delays in processing and may even make your return invalid. Make sure the form you choose matches your income type-whether it's salary, business income, or income from other sources. Filing with the right form ensures your return is accepted and processed smoothly.

"Refunds are not just about submitting your ITR. They require strategy, accuracy, and proactive planning. By being smart about your deductions, filing early, and avoiding errors, you can unlock larger refunds and more interest this year," added CA Arpit Yadav of Two Tax.

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