The Income Tax Department has reportedly started sending bulk SMS and email alerts to taxpayers for Assessment Year 2025-26, placing refunds on hold under its risk management process due to discrepancies in their ITR filing.
The move has sparked widespread chaos and confusion among taxpayers, with many expressing their frustration on social media platforms. Concerns range from clarity on the alerts to the impact on pending refunds.
The alerts also come as the due date to file a revised return is fast approaching, with taxpayers required to make the necessary corrections and file their return of income by 31 December 2025. This has also prompted some taxpayers to seek an extension, citing the unusually short filing window and the backlog in ITR processing.
If you are one of the receivers of such alerts, here’s a detailed guide on what it means and what you should do next.
An “ITR refund on hold” alert is not necessarily a sign of scrutiny. It simply means that the system has detected a mismatch with the Tax Deducted at Source (TDS) details or information reported under section 285. The notice aims to give the assessee an opportunity to rectify any discrepancies, if present, said Ashok Mehta, Managing Council Member of The Chamber of Tax Consultants.
“It is a pre-refund verification and this is the first time the government has implemented this on a mass scale,” said Suraj Singh, the founder of SD Singh and Associates, Chartered Accountants.
He also mentioned that previously, these alerts were specific to cases where there were “donations” involved. Now, however, they are being sent in most cases with big value refunds.
While this is a routine check, it may also lead to scrutiny wherever the system detects or has additional evidence of wrongful deductions being claimed, Singh noted.
There are several types of mismatches that commonly lead to an income tax return being put on hold. Here are the most common cases, as explained by Suraj Singh.
— Interest income not offered, though it is reflected in Annual Information Statement (AIS).
— Capital gains missing or incorrectly reported by the taxpayer.
— Failing to disclose dividend Income during ITR filing.
— Large deduction claims under 80C / 80D / 80G, that do not match with the back-end records of the Income Tax Department.
— One major reason is claiming HRA deductions without deducting TDS on rent. This is a direct & easily detectable non-compliance that many professionals and salaried employees tend to overlook.
— Inconsistencies in disclosures compared to previous years, including sudden spikes in exemptions and deductions.
The due date to file a belated return is 31 December, providing taxpayers with an opportunity to correct errors in their originally filed ITR. This window allows individuals to revise their returns in cases where mistakes were made in reporting income, deductions or other details.
According to Singh, if the corrections highlighted in the I-T Department’s alert are not addressed before the deadline, certain consequences may follow, though these are not mandatory.
“The case may move to limited scrutiny; taxpayers will be required to submit data. In some cases, demand notice may be generated if I-T Department has direct evidence of misreporting by disallowing claims or adding undisclosed Income,” he noted.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Taxpayers are advised to consult a qualified tax professional or refer to the official website of the Income Tax Department for accurate and up-to-date guidance before filing their returns.
Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Download the Mint app and read premium stories
Log in to our website to save your bookmarks. It'll just take a moment.
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.

source