If you have claimed incorrect tax deductions or exemptions while filing your Income Tax Return (ITR) for the financial year 2025–26, it is time to be extra cautious. The Income Tax Department has intensified its scrutiny of suspicious ITR filings and has already started sending email and SMS alerts to taxpayers, asking them to review and, if necessary, file revised returns.
According to official information, from December 12 onwards, the department has flagged hundreds of ITRs where discrepancies, unusual claims, or potentially false deductions have been detected. Taxpayers identified under this verification drive are being advised to correct mistakes voluntarily before stricter action is initiated.
The Income Tax Department has observed a growing trend of incorrect or inflated tax claims made solely to reduce tax liability. These include overstated deductions, fake expense claims, and donations shown under sections meant for tax benefits, even when such payments do not qualify.
Officials say the department’s data analytics and AI-based systems are now capable of matching ITR data with multiple sources such as bank transactions, employer filings, donation records, and third-party information. Any mismatch immediately raises a red flag.
The current verification exercise aims to ensure fair taxation and prevent revenue loss, while also giving honest taxpayers an opportunity to rectify unintentional errors.
The investigation is not limited to individual taxpayers. The Income Tax Department is also examining the role of tax filing companies, consultancies, and firms that file bulk ITRs on behalf of salaried individuals.
In many cases, such firms allegedly tempt taxpayers with promises of higher refunds and lower tax outgo. To achieve this, they may insert incorrect deductions or exemptions without properly explaining the risks involved.
Officials have found instances where:
Fake or inflated expenses were shown
Ineligible deductions were claimed
Refunds were sought using misleading data
The department has made it clear that both taxpayers and intermediaries can be held accountable if deliberate misreporting is established.
One of the most serious issues detected during the ongoing scrutiny relates to donations claimed under political contribution deductions. Investigations revealed that several taxpayers showed donations made to registered but unrecognised political parties, which do not qualify for tax benefits.
In some cases, these donations were either not made at all or routed in a manner that violated tax rules. The department has now tightened checks on such claims and is likely to take strict action against false reporting under this category.
If you have received an SMS or email from the Income Tax Department, it does not automatically mean a penalty. These messages are part of a compliance and correction drive.
The alert typically asks taxpayers to:
Review their filed ITR
Verify deductions and income details
File a revised return, if required
Tax experts advise taxpayers to respond promptly and correct genuine mistakes voluntarily. Ignoring such communication could lead to notices, penalties, interest, or even prosecution in serious cases.
Tax professionals strongly recommend filing ITRs with accurate and verifiable information only. While saving tax is legal, doing so through false claims or manipulation can have long-term consequences.
Experts warn that:
Penalties may range from 50% to 200% of the tax amount
Incorrect refunds may have to be returned with interest
Repeated violations can impact future assessments
They also advise taxpayers to personally review their ITR, even if it is filed by a consultant or agency.
The Income Tax Department’s latest action sends a clear message: incorrect tax claims will no longer go unnoticed. With advanced tracking systems and tighter verification, the margin for error—or manipulation—has significantly reduced.
If you have made a genuine mistake, filing a revised ITR at the earliest is the safest route. Honest and transparent reporting not only keeps you compliant but also saves you from unnecessary stress, legal notices, and financial penalties in the future.
