Income Tax Department Clarifies ‘Transaction’ Message Sent to Taxpayers, Explains Purpose

The Income Tax Department has issued a clarification on the recent SMS and email communications sent to taxpayers regarding certain financial transactions, stressing that these messages are advisory in nature and not enforcement notices.

The department said the outreach is designed to help individuals voluntarily review and correct their income tax returns wherever required.

According to officials, the communication is part of a wider effort to promote transparency and voluntary compliance by informing taxpayers about transaction details already available with the tax authorities.

Why the Income Tax Department Sent the Transaction Messages

The clarification comes amid heightened scrutiny of fraudulent tax filings, particularly cases involving intermediaries who allegedly helped taxpayers make false claims related to donations to unrecognised political parties or charitable organisations to reduce tax liability.

The department said the messages were sent only in specific cases where discrepancies were noticed between the information declared in income tax returns and data received from reporting entities such as banks and financial institutions.

"The communication is just an advisory sent in only those cases where there is an apparent significant gap between disclosures in the ITR & information as received from the Reporting Entities," the I-T Department said in a detailed post on X.

Aim Is Voluntary Correction, Not Penal Action

Officials emphasised that the objective of the communication is to give taxpayers an opportunity to review their filings using the Annual Information Statement and correct any errors voluntarily. Taxpayers can submit their responses online through the Compliance Portal of the Income Tax Department.

If discrepancies are found, individuals have the option to revise their already filed returns. Those who have not filed an income tax return so far can also submit a belated return, as per the department.

"Taxpayers are requested to respond promptly via Compliance Portal if discrepancies exist or ignore if your filing is correct," the department noted.

Belated ITR Filing Deadline Explained

Although the original deadline for filing income tax returns ended on 16 September, the department clarified that taxpayers can still file a belated return up to 31 December 2025.

The provision for filing a belated return is considered crucial, as it allows taxpayers to regularise their tax filings and avoid penalties or fines linked to non-compliance, provided they act within the stipulated time frame.

The department reiterated that the current exercise is aimed at encouraging accurate disclosures and easing compliance, rather than initiating punitive action against taxpayers.