Income Tax Department message on transactions: What taxpayers should know for ITR AY 2025-26

The Income Tax Department (ITD) on Thursday issued a clarification amid concerns over emails and messages received by taxpayers during the ongoing ITR filing season for assessment year 2025–26.

The department said the communications are meant to help taxpayers review and correct disclosures, and should not be seen as punitive notices.

Why the Income Tax Department is sending messages to taxpayers

The Income Tax Department (ITD) has issued a clarification amid concerns over emails and messages received by taxpayers during the ongoing ITR filing season for assessment year 2025–26. The department has said these communications are advisory in nature and are not notices for enforcement or punitive action.

According to the ITD, messages are sent only in cases where there appears to be a significant mismatch between information disclosed in Income Tax Returns (ITRs) and data received from banks, employers, registrars and other reporting entities.

Purpose of the advisory messages

According to the ITD, such messages are sent only in cases where there appears to be a significant mismatch between information reported in Income Tax Returns (ITRs) and data received from banks, employers, registrars and other reporting entities. The aim is to make taxpayers aware of the information already available with the department and encourage voluntary correction.

The department said the objective of the communication is to inform taxpayers about information already available with the tax authorities and provide them an opportunity to review their filings.

The outreach is intended to facilitate voluntary compliance, allowing taxpayers to correct any discrepancies before the matter escalates into formal scrutiny.

What taxpayers are advised to do

Taxpayers who receive such messages are advised to:

• Review their Annual Information Statement (AIS)
• Submit feedback through the Compliance Portal
• Revise an already filed return, or
• File a belated return if an ITR has not yet been submitted

The ITD has reminded taxpayers that December 31, 2025, is the last date to revise or file a belated return for assessment year 2025–26.

If a taxpayer’s filing is correct, the department has said no action is required.

Clarification amid delayed tax refunds

The clarification comes amid reports of delayed tax refunds in cases where claims were flagged as high-value or red-flagged.

CBDT Chairman Ravi Agrawal had earlier stated that scrutiny was initiated following instances of wrongful deductions and incorrect claims, while legitimate refunds continued to be processed.

Focus on foreign assets and income disclosure

The advisory messages are also linked to a targeted compliance drive aimed at improving disclosure of foreign assets and income.

Around 25,000 high-risk cases were identified where foreign assets appeared to exist but were not disclosed in ITRs. These taxpayers were contacted through email and SMS advisories asking them to review their AIS and make corrections before the December 31 deadline.

What AIS data really indicates

Tax experts have pointed out that the AIS reflects high-value transactions linked to a PAN, but this does not automatically mean additional taxable income.

Transactions such as gifts from close relatives, inheritance, redeposit of personal cash withdrawals, or agricultural income may be non-taxable. However, taxpayers must be able to substantiate the source and genuineness of such transactions with proper documentation.

Why ignoring the messages may be risky

Experts caution that acknowledging AIS information as correct without revising the return — where income was missed — leaves discrepancies legally unresolved.

While the current communications are advisory, prolonged inaction could lead to formal notices, tax demands, interest or penalty proceedings if mismatches remain unaddressed.