The Income Tax Department has flagged a large number of tax returns for mismatches, resulting in refunds being put on hold. Taxpayers whose returns were identified must file revised returns by 31 December 2025 to correct the discrepancies. If you don’t act by the deadline, you may face additional tax liabilities, interest and other consequences.
Why refunds are being held
Refunds are typically withheld when the income declared in an Income Tax Return (ITR) does not match third‑party information available with the tax department. Common causes include:
- Mismatch in TDS/TCS credits — differences between your ITR and tax credit statements from employers, banks or other deductors.
- Undeclared income — interest, dividends, capital gains or freelance income not reported in the original return.
- Incorrect bank or PAN details — wrong account numbers or mismatched PAN/Aadhaar information.
- Clerical or reporting errors — misplaced decimal points, wrong income heads, or omitted entries.
How to find out if you’re affected
If you’ve been identified for a mismatch, you will usually receive a communication via SMS, email or through your account on the tax e‑filing portal. You can also proactively check:
- Your tax e‑filing account for any notices, intimations or demand orders
- Your tax credit statement (Form 26AS or its equivalent) and reconcile it with the figures in your filed ITR
- Bank account and PAN/Aadhaar records for any mismatch messages
What to do before 31 December 2025
If you’ve been notified, follow these steps promptly to avoid additional charges:
- Gather documents: Form 16/16A, Form 26AS, bank statements, capital gains statements, dividend or interest certificates and any other supporting papers.
- Reconcile figures: Match TDS/TCS credits and income items between your documents and the filed return.
- Calculate tax shortfall: Work out any additional tax, interest and possible penalty you may owe. It’s wise to consult a tax professional if the numbers are complex.
- File a revised return: Use the e‑filing portal to submit a revised ITR for the relevant assessment year. Make sure to choose the correct “revised return” option and mention the reason for revision if required.
- Pay dues before submission: Deposit any self‑assessment tax, including applicable interest, so the revised return reflects cleared liabilities. Keep the payment receipt for records.
- Keep acknowledgements: Save the acknowledgement number and all receipts after submission — they are proof you complied before the deadline.
Consequences of missing the deadline
Failing to file a revised return by 31 December 2025 can lead to:
- Continued hold on refunds
- An increased tax demand and interest on the outstanding amount
- Potential penalties or delays in resolving disputes
- More time and effort required to rectify records later
If you disagree with the mismatch
If the notice appears incorrect — for example, if the tax credit statement already shows the right figures — respond quickly. Keep proof like payment receipts or employer certificates and raise the issue through the grievance channels on the tax portal or seek help from a tax advisor. Early, documented communication improves chances of faster resolution.
Tips to avoid future mismatches
- Reconcile Form 26AS and other tax credit statements regularly.
- Check TDS certificates from employers and deductors before filing.
- Verify PAN, bank account and contact details annually on the tax portal.
- Report all income streams — salary, freelancing, interest, dividends and capital gains.
- File returns on time and keep supporting documents for at least a few years.
Quick checklist to act now
- Check your inbox and tax account for a notice.
- Download Form 26AS and cross‑verify with your ITR.
- Prepare documents and compute any additional tax and interest.
- Pay outstanding tax and file the revised return before 31 Dec 2025.
- Save all acknowledgements and payment proofs.
Time is limited, and acting now will reduce the risk of extra costs and lengthy disputes. If the numbers look complex or the amounts are significant, consider getting professional help to ensure your revised return is accurate and accepted without delay.