Income Tax Department Sends Alerts to Taxpayers
The Income Tax Department has recently sent messages via email and SMS to numerous taxpayers, urging them to review their tax deduction and exemption claims for the assessment year 2025-26. These alerts were issued as part of the department’s proactive strategy to ensure compliance ahead of the December 31 deadline for filing revisions to Income Tax Returns (ITRs).
In a press release, the department explained that advanced risk analytics identified several ITRs that need further scrutiny, particularly those with questionable claims, to prevent mistakes from escalating into compliance issues.
Understanding the Alerts
The primary reason for these communications is the identification of specific ITRs flagged under the department’s risk management framework. Instances that raised flags include potentially ineligible deductions—such as claims associated with donations to Registered Unrecognised Political Parties (RUPPs)—and discrepancies in the submitted returns.
“We want to provide taxpayers with a chance to address their claims before taking further action,” said an official from the Income Tax Department.
Details on Correction Process
The department advised taxpayers to carefully review their deductions and exemptions, checking against supporting documents. Essential paperwork to consult includes Form 16, Form 26AS, the Annual Information Statement (AIS), and the Taxpayer Information Summary (TIS). Any errors identified should be rectified by filing a revised ITR before the December 31 cutoff to avoid penalties.
“This initiative represents a ‘trust-first’ approach,” the official added, emphasizing the importance of voluntary compliance over immediate enforcement actions. Taxpayers with legitimate claims need not take further steps, as no action will be required from them.
Consequences of Ignoring Messages
Tax experts have warned that ignoring the alerts could have serious ramifications. If discrepancies remain unaddressed, the Income Tax Department may disallow certain deductions, resulting in additional tax liabilities, accrued interest, penalties, and potential delays or cancellations of refunds.
Consultants advise not to panic but to rapidly assess claims and rectify mistakes where necessary. “Addressing these errors now can prevent further complications down the line,” said a tax professional.
Refund Processing Delays
Separate from deduction claims, some salaried taxpayers have reported experiencing delays in refund processing due to discrepancies. Common issues seem to stem from deductions claimed directly on ITRs that were not previously declared to employers during TDS calculations.
“Many taxpayers may not realize they can claim eligible deductions directly in their Returns,” noted a chartered accountant. They clarified that even if an employer does not account for these deductions, taxpayers retain the legal right to claim them.
Call to Action Before the Deadline
As the year-end deadline approaches, taxpayers are encouraged to verify all claims meticulously. The Income Tax Department confirms that those who miss the initial December 31 deadline may still file an updated return starting January 1, 2026. However, this option will incur additional taxes, making timely compliance more preferable.
Already during the current financial year (FY 2025-26), over 21 lakh taxpayers have voluntarily updated their ITRs for earlier assessment years, contributing over ₹2,500 crore in taxes. For the ongoing assessment year, more than 15 lakh returns have been revised.
Conclusion: Importance of Compliance
The government wishes to mitigate compliance failures among taxpayers while promoting transparency within the taxation system. Ongoing education about tax regulations and rights is essential for fostering a financially responsible citizenry.
Through continuous monitoring and communication, the Income Tax Department aims to enhance tax compliance and simplify the filing process for all taxpayers, reinforcing a culture of accurate declaration and accountability.