ITR Filing AY 2025-26: The Income Tax Department has clarified that recent messages sent to some taxpayers for ITR filing AY 2025-26 are advisory in nature, not enforcement actions. These messages are issued only when there is a significant mismatch between income declared in the return and data received from reporting entities. Taxpayers are advised to review their Annual Information Statement (AIS) and respond via the Compliance Portal before December 31, 2025.
Taxpayers filing Income Tax Returns (ITRs) for the Assessment Year (AY) 2025-26 are being inundated with SMS and email notifications from the Income Tax Department (ITD). While many initially interpreted these communications as warnings of scrutiny or penalties, the department has clarified that the messages are advisory in nature, intended to promote voluntary compliance and help individuals rectify genuine errors before the deadline.
This development has sparked widespread anxiety, particularly among salaried individuals and small taxpayers, who are now scrambling to understand the implications of the messages and what actions—if any—they should take. The ITD has sought to dispel rumors and provide clarity on the purpose and procedure behind the communications.
Some references have come to the notice of the Income Tax Department regarding recent communication sent to taxpayers pertaining to transaction(s) made by them.
— Income Tax India (@IncomeTaxIndia) December 18, 2025
Taxpayers may please note that such communication is to facilitate the taxpayers & make them aware of the information…
Understanding the Advisory Message: What Triggers It?
The ITD stated that the messages are triggered by “visible discrepancies” between the income reported in an ITR and the transactional data the department receives from third-party sources such as banks, mutual funds, employers, and financial institutions. This data is compiled into the Annual Information Statement (AIS), a comprehensive record of a taxpayer’s financial activities.
For example, a mismatch could arise if a taxpayer fails to report interest income from savings accounts, does not disclose capital gains from selling mutual funds, or overlooks foreign income reported under the Automatic Exchange of Information (AEOI) framework. The system automatically flags such cases and sends an advisory message to the taxpayer.
Common Reasons for AIS Mismatches: ITR Filing AY 2025-26
The ITD listed several scenarios that often lead to these mismatches, which are summarized below:
| Reason for Mismatch | Explanation |
|---|---|
| Missing bank interest | Interest income not included in the ITR |
| Capital gains mismatch | Sale of shares or mutual funds not disclosed |
| Foreign income not declared | Income reported under AEOI but unaccounted in ITR |
| Incorrect income head | Salary incorrectly categorized as business income |
| Wrong PAN mapping | Transactions linked to a wrong PAN |
Official Clarification: Not a Notice, Not a Penalty
To address the confusion, the ITD issued a public statement on X (formerly Twitter), emphasizing that these messages are not legal notices, not scrutiny letters, and do not imply enforcement action.
The department’s primary objectives are:
- Encouraging voluntary compliance by drawing attention to discrepancies.
- Informing taxpayers about available transaction data to identify errors.
- Allowing correction of genuine mistakes through revised returns or feedback.
“It’s a one-way communication to help taxpayers align their filings with their actual financial activities,” said an ITD spokesperson. “The outreach is limited to cases where data gaps are clearly visible at a preliminary stage.”
What Taxpayers Should Do Next
The ITD has outlined a step-by-step process for individuals who receive an advisory message:
- Log In to the IT Portal: Visit incometax.gov.in to access your AIS.
- Review AIS Carefully: Cross-check each transaction listed in the AIS with your filed ITR.
- Submit Feedback: If entries are incorrect or belong to another PAN holder, use the AIS feedback section to report them.
- Revise or File a Belated Return: If gaps are identified, correct your return or file a belated ITR.
- Respond via Compliance Portal: Use the Compliance Portal to confirm compliance if no errors are found.
Key Deadline Reminder
Taxpayers are advised to act swiftly, as the last date for filing a belated return or revising an ITR for AY 2025-26 is December 31, 2025. Missing this deadline may result in penalties and disqualification from claiming refunds.
Why Are Refunds Delayed for Some?
The Central Board of Direct Taxes (CBDT) acknowledged that some refunds for AY 2025-26 are experiencing delays due to additional verification of high-risk claims. These include cases with:
- Exaggerated deductions (e.g., under Section 80C)
- Inflated refund demands
- Incorrectly claimed exemptions
Chairman Ravi Agrawal assured that “genuine, low-risk refunds are being processed normally, while we scrutinize suspicious claims to prevent tax evasion.”
Special Compliance Drive: Foreign Assets and Income
In a related development, the ITD launched a targeted campaign to ensure compliance with AEOI data. This effort focuses on 25,000 high-risk cases involving undisclosed foreign assets, such as overseas bank accounts or property. Key details include:
| Details | Information |
|---|---|
| Issue | Non-disclosure of foreign assets/income |
| Compliance Mode | SMS/Email |
| Deadline | December 31, 2025 |
| Legal Framework | Income Tax Act and Black Money (Undisclosed Income) Assessment Act, 2015 |
Failure to comply may attract penalties of 200% to 300% of the undisclosed income under the Black Money Act.
Reassurance: No Legal Action Immediately
The ITD reiterated that the advisory messages are preventive and educational, not punitive. “If your filing is accurate, you need not take any action after reviewing your AIS,” the department stated. “However, ignoring the message without addressing the discrepancy could attract attention in the future.”
FAQs for Taxpayers: ITR Filing AY 2025-26
Q1. Why did I get an Income Tax message?
A: It indicates a mismatch between your ITR and AIS data, such as unreported income or incorrect categorization.
Q2. Is this a legal notice?
A: No. It is an advisory message to help correct errors.
Q3. What if I received the message, but my filing is correct?
A: Review your AIS and confirm compliance via the Compliance Portal. No further action is needed.
Q4. Can I ignore the message?
A: Incorrect ITRs risk penalties. Address discrepancies by December 31, 2025.
Q5. Why are refunds delayed?
A: Only high-risk claims face additional verification; legitimate refunds are unaffected.
Conclusion: ITR Filing AY 2025-26
The ITD’s advisory messages aim to strengthen tax compliance in the digital age, leveraging advanced data analytics to bridge gaps between self-reported income and third-party records. While the initiative has caused initial anxiety, experts emphasize that it is a “nudges” for transparency rather than a heavy-handed crackdown.
As tax filing deadlines approach, taxpayers are urged to proactively review their AIS, rectify errors, and ensure compliance to avoid future complications. The ITD’s focus on voluntary correction reflects a broader trend toward using technology to promote fairness in the tax system.
For more information, visit the Income Tax Department website or consult a tax professional.
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