Income Tax Refund Status: The Income Tax Department has tightened scrutiny of tax returns and several taxpayers have not received their income tax refunds this year. The delay in tax refunds is the result of greater vigilance on tax deductions and exemptions claimed by taxpayers.Ahead of the deadline for filing an updated or delayed return on December 31, 2025, the Income Tax Department has also launched a Non-intrusive Usage of Data to Guide and Enable (NUDGE) campaign encouraging taxpayers to file updated returns as their tax exemption, deduction and refund claims have been found ineligible.
ITR December 31, 2025 Important deadline for tax refunds
According to an ET report, these taxpayers may face delay in income tax refund if they fail to file revised income tax return by December 31, 2025 for the assessment year 2025-26, especially in cases where errors or missing information have led to incorrect refund claims or data conflicts.The Income Tax Department has started sending emails and text messages to taxpayers who have claimed what the tax department calls “ineligible” deductions or exemptions to which they are not entitled. These taxpayers have been asked to correct any errors and file a revised tax return by December 31, 2025.Also read | ITR Filing: Have you received a ‘nudge’ from the Income Tax department for tax returns and refund claims? Here’s what you need to do The December 31, 2025 deadline is significant because it represents the final date for filing revised and late income tax returns. Once a tax return is processed by the central processing center, any discrepancies or errors that are displayed and communicated to the taxpayer are prompted for detailed review. However, if the return is processed after the deadline, the notice highlighting the error may be received even after December 31, depriving the taxpayer of the opportunity to revise the return, the ET report said.As a result, taxpayers whose returns contain errors that are discovered after the deadline has expired will face further review or assessment proceedings, even if the error was unintentional.
Nudge campaign
Chartered Accountant Suresh Surana was quoted as saying, “Accordingly, after the expiry of this date, a taxpayer cannot revise the return of income to correct errors or omissions even if the return has not yet been processed by the central processing center.”Taxpayers who fail to file a revised income tax return by December 31, 2025 risk having their income tax refund delayed. This is especially true for employees whose tax returns do not match those of their employer.Abhishek Soni, CEO and co-founder of Tax2win, said many employees have received notices from the Income Tax Department. These cases largely involve employees who have claimed deductions such as those under Section 80C, 80D or house rent allowance in their tax returns but have not disclosed these entitlements to their employers at the time of tax deduction at source.Maneesh Bawa, partner at Nangia Global, noted that these discrepancies are common and can arise when taxes have been deducted under the new system but the tax return is filed under the old system with deductions claimed.Jigar Suba, founder of JC Suba & Associates, told ET that such innuendos can be triggered by a number of errors, including false or excessive deduction claims, discrepancies between reported income and the data contained in the annual information return or summary of tax information, and discrepancies between the income tax return and Form 26AS. Other common reasons include misrepresentation of home rental allowances or vacations, unsupported deductions for life or health insurance, and ineligible donations to charities or political parties.He added that failure to disclose income beyond salary was another major trigger, with failures often related to the sale of mutual funds, stock shares, crypto assets, as well as other capital gains or interest income.Abhishek Soni said such insinuations were significant as they indicated that the Income Tax Department had found a discrepancy in the tax return and that its data did not fully support the deductions claimed. He warned that ignoring the notice could result in tax claims, interest liabilities or further notices from the ministry.Maneesh Bawa said that if the Income Tax Department has found an error, taxpayers should file a revised tax return within the permissible deadline, which is currently December 31, 2025. He warned that ignoring a real discrepancy could result in claims being rejected and require more scrutiny, which could lead to additional tax liabilities as well as interest and penalties.
