The Income Tax Department has established December 31, 2025, as the final deadline for filing revised income tax returns (ITR) for Assessment Year 2025-26. Taxpayers across the country have been receiving SMS and email alerts from the department regarding ITR filings placed on hold due to filing mismatches. These taxpayers must submit their revised returns before the approaching deadline to avoid potential complications.

Understanding Revised ITR Filing

Under Section 139(5) of the Income Tax Act, 1961, taxpayers who have already filed their income tax returns but subsequently discovered errors can submit a revised return. This provision allows individuals to make necessary corrections and align their ITR filing with actual financial disclosures.

A revised ITR enables taxpayers to rectify various types of mistakes made in their original submissions. The following table outlines common errors that can be corrected through revised filing:

Key Provisions and Limitations

Taxpayers must understand that filing a revised ITR completely replaces the original return. The revised submission becomes the final income tax return for the relevant assessment year. Current income tax laws impose no limit on the number of times a taxpayer can file a revised return, provided all submissions occur before the December 31, 2025 deadline.

Consequences of Missing the Deadline

Failing to file a revised ITR before the deadline can result in several adverse outcomes for taxpayers. While the Income Tax Department does not impose penalties specifically for filing revised returns, missing the deadline creates complications.

The following table summarizes potential consequences:

Importance of ITR Intimation Compliance

The ITR intimation serves as a crucial communication tool, informing taxpayers about mismatches identified in their returns. Ignoring these notifications can trigger a cascade of complications including tax demands, future notices, and disallowance of legitimate claims. This situation often leads to enhanced scrutiny from the department and may result in additional tax liability.

Taxpayers who file revised returns before the deadline help maintain clean tax records. The department's current approach focuses on encouraging voluntary compliance through these intimations rather than imposing immediate penalties. However, the December 31, 2025 deadline represents the final opportunity for taxpayers to address identified discrepancies without facing more severe consequences.

Taxpayers who filed their income tax returns on time are facing unusually long delays in refund processing, even for seemingly complete and error-free submissions. The widespread delays have affected taxpayers across income brackets, creating uncertainty about timelines and underlying reasons for the hold-ups.

Fundamental Shift in Processing Approach

Tax expert Gauri Chadha has identified a significant change in how refunds are being processed. Unlike previous years, a majority of cases have reportedly been placed on hold, with even the basic processing of returns experiencing delays. This represents a departure from the traditional one to two-week refund timeline that taxpayers had come to expect.

The current delays extend beyond routine processing issues such as failure to e-verify returns, incorrect bank validation, or adjustments against outstanding tax demands from previous years. The scale of scrutiny appears to have expanded significantly, potentially affecting a much larger pool of taxpayers than the usual high-income or high-risk profiles.

Refund Amount Thresholds Under Review

While the income tax department has not published official thresholds, observable patterns suggest specific refund amounts may trigger additional scrutiny:

The department is also reportedly flagging property purchases and other large transactions, even when taxpayers are not claiming related exemptions. Transactions are being cross-referenced through various reporting mechanisms, regardless of whether they need to be disclosed in the return.

Communications vs Formal Notices

A significant number of taxpayers have reportedly received messages from the income tax department requesting review of deductions, exemptions, and high-value transactions. Chadha emphasized that these are communications rather than formal notices, though the distinction has not always been clear to recipients.

The department has clarified that if no error exists on the taxpayer's end, these communications can be ignored. However, missing the response deadline may increase compliance costs, as taxpayers might need to file updated returns, which could carry higher penalties and interest.

Expected Timeline and Recommendations

Legally, the income tax department has until the end of the next financial year to process returns. However, Chadha expects movement only after the December 31 deadline for revising returns passes. She advises against unnecessary return revisions, recommending that taxpayers revise only when actual discrepancies exist.

Administrative Contributing Factors

Several administrative elements have reportedly compounded the processing delays:

• Late release of filing utilities
• Extended filing deadlines
• Shortened window for revising returns compared to previous years
• Increased complexity from regime switching between old and new tax structures

Key Actions for Taxpayers

To minimize delays, taxpayers should cross-verify all disclosures before filing and ensure that even exempt income is properly reported. Leaving out any income, regardless of its taxable status, may create red flags in the system. For those switching between tax regimes, proper completion of Form 10-IA and its acknowledgment number becomes critical during the filing process.

Expanded Scrutiny Beyond Routine Cases

The income tax department has reportedly expanded its scrutiny process, going beyond routine error checks. Tax experts have flagged this expanded scrutiny as a key reason for the unusual delays in processing refunds. Notably, refunds above ₹10,000 are reportedly being subjected to additional review, which may affect a large number of taxpayers.

This expanded scrutiny could represent a fundamental shift in the department's approach, moving from targeted reviews of high-risk or high-income profiles to a more comprehensive examination of a broader range of tax returns. The change has led to widespread delays, even for taxpayers with seemingly straightforward returns.

Taxpayers are advised to be patient and prepared for potential inquiries from the tax department. While the increased scrutiny may lead to short-term inconveniences, it is part of the department's efforts to ensure compliance and accuracy in tax filings. As the situation evolves, taxpayers should stay informed about any updates or communications from the income tax department regarding their refund status.