NEW YORK, December 29, 2025, 01:00 ET
- Thousands of Indian taxpayers have received tax department messages saying income-tax refunds were put on hold under a “risk management” review, India Today and the Economic Times reported. 1
- The alerts have landed days before a Dec. 31 deadline to file belated or revised income-tax returns for the 2025-26 assessment year, a government tax calendar shows. 2
- Tax advisers said blunt wording and data mismatches — including donation and deduction claims — have left even compliant filers unsure what to do next. 3
India’s Income Tax Department has told thousands of taxpayers their refund claims have been put on hold under a “risk management” process, triggering anxiety and a rush for advice at the end of the year, Indian media reported. 1
The timing matters because Dec. 31 is the last day to file a belated return — a late original filing — or to revise a previously filed income-tax return (ITR) for the 2025-26 assessment year, according to government guidance and the tax department’s calendar. 2
After that date, taxpayers can still file an “updated” return to correct details, but it cannot be used to claim a refund or increase one, government guidance shows. 4
India Today reported that taxpayers have received SMS and email alerts stating their refund claims were “identified under the risk management process” and that processing had been put on hold. 1
The Economic Times said “do not reply” emails have been sent mainly to wealthy taxpayers who donated large sums to charities and to salaried employees whose claimed deductions do not match Form 16 — the employer-issued statement of salary and tax withheld. 3
At the center of the episode is the tax department’s growing reliance on automated checks that match what taxpayers report with data from employers, banks, mutual funds and other reporting entities, India Today said. 1
Those comparisons use records such as Form 16, Form 26AS and the Annual Information Statement, which aggregates third-party data on income and transactions, it said. 1
Tax professionals told India Today that mismatches can arise even when claims are legitimate, such as when an employer rejects deduction proofs but the employee later claims them in the tax return with supporting documents. 1
The Economic Times said the emails cite reasons including incorrect charity details and donation claims linked to organisations not registered for tax breaks under Section 80G of the Income Tax Act, as well as refund claims that appear high relative to salary. 3
Other red flags listed in the emails include capital gains figures that do not match the Annual Information Statement or Taxpayer Information Summary, and high house-rent allowance or leave-travel allowance claims, the Economic Times reported. 3
Recipients have complained the communications often do not specify what triggered the flag or how long refunds would be held, leaving taxpayers to decide whether to revise their filings or wait, the outlets reported. 3
“A well-intended policy is overshadowed by poor communication,” said Mohit Bang, a partner at Hyderabad-based chartered accountancy firm Trivedi & Bang, the Economic Times reported. 3
Government guidance defines a belated return as a filing made after the original due date, while a revised return allows taxpayers to correct mistakes or omissions in a return already filed. 5
The same guidance says both belated and revised returns can be filed up to Dec. 31 of the assessment year or before the tax department completes an assessment, whichever is earlier. 5
India Today said taxpayers who received alerts were advised to log on to the tax portal, compare their filed return with Form 16, Form 26AS and the Annual Information Statement, and file a correction only if there is an actual error. 1
Tax expert Mayank Gosar, CEO of Softcon Capital, told India Today the messages were intended as a compliance nudge rather than a traditional notice, and that taxpayers with genuine, documented claims may not need to revise their returns. 1
