The Income Tax Department has launched an aggressive campaign of verification for Income Tax Returns filed for Assessment Year 2025-26, distributing an exceptionally high number of communications to taxpayers whose filings exhibit inconsistencies, resulting in the immediate suspension of return processing for affected cases to prevent erroneous refunds.

Employing sophisticated automated risk profiling systems, the department has pinpointed numerous instances where claimed refunds significantly exceed amounts justified by corroborated data from sources such as TDS certificates, Form 26AS, and employer submissions, thereby triggering widespread alerts to ensure compliance and accuracy.

Primary areas of concern encompass discrepancies between deductions or exemptions declared in the ITR and those reflected in Form 16 (particularly Annexure-II), questionable claims under sections for political donations or contributions to certain trusts, omission of mandatory disclosures regarding foreign assets, and various other anomalies flagged through advanced cross-verification algorithms.

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Though these communications are officially termed "alerts" to distinguish them from formal scrutiny notices, their gravity cannot be understated, as taxpayers are explicitly cautioned to thoroughly review and substantiate their filings with appropriate documentation, failing which cases may escalate to full-fledged assessments or penalties.

Amid the surge coinciding with the festive season, tax practitioners and industry bodies have petitioned the Finance Ministry for an extension of the belated revision window from the current deadline of December 31, 2025, to January 31, 2026, while outlining clear remedial options: penalty-free revisions by year-end, updated returns with applicable additional tax thereafter, or inaction that substantially heightens the probability of selection for detailed departmental scrutiny.

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