The final date for filing the Income Tax Return (ITR), which was September 16, has already passed. Now, taxpayers across India are eagerly waiting for their Tax Refund. However, this year, the department is strictly scrutinizing documents to ensure no one has gained an unfair advantage by using fraudulent paperwork or making fake claims. The Income Tax Department is now preparing to send notices in such cases where discrepancies are found.

ITR Refund: Why Rigorous Scrutiny is Causing Delays

The last date for filing the Income Tax Return (ITR) was September 16, 2025, and it has already passed. Now, the majority of taxpayers are focused on receiving their refund. Those who filed their return on time want their money back as soon as possible. But the current situation is slightly different, as the department is now strictly checking every detail before processing the refund.

The Income Tax Department has stated that people sometimes try to benefit from a refund by providing incorrect information. This leads to millions of rupees in fraud being uncovered every year. This is precisely why the department is extremely cautious this time and will only issue the refund after checking the details of every single case. The biggest reason for the delay in the refund is the rise in Fake Claims. Many people attempt to get a refund by submitting false documents. To catch such cases, the Income Tax Department utilizes advanced technology and robust data matching algorithms. People commit various types of fraud, such as:

• Showing fake medical bills to claim deductions.
• Claiming incorrect or exaggerated HRA (House Rent Allowance).
• Making entries for overstated donations to secure tax benefits.
• Saving tax by underreporting income deliberately.

These are common methods people use to try and get a refund. However, this time, the department is tightening its grip strictly on these fraudulent practices.

How the Income Tax Department Catches Fraud

The Income Tax Department has several ways to detect incorrect or fake claims. A list of some key methods is provided below. If any of these details do not match the department’s records, they may immediately issue a notice. The core of their strategy is technology-driven cross-verification:

• Form 26AS Matching: The department matches your reported income with the Tax Deducted at Source (TDS) and other taxes paid on your behalf (as reported in Form 26AS). If your claims for TDS or income deviate significantly, it raises a flag.
• AIS (Annual Information Statement) Report Verification: The AIS report provides a comprehensive view of all your financial transactions, including banking, investments, high-value purchases, and mutual fund dealings. The department cross-checks the details in your ITR against the AIS to ensure full disclosure of income and assets.
• PAN-Aadhaar Linking: This linkage verifies your personal data against a trusted national identity system, helping to prevent cases where multiple identities might be used for tax evasion.
• Physical Document Check: In cases of suspicion, the department may ask for the original bills and slips related to the claimed deductions (e.g., medical bills, rent receipts, donation receipts) for a thorough examination.

Important Precautions for Taxpayers

What Should You Do Upon Receiving a Notice?

If someone receives a notice from the Income Tax Department, there is no need to panic. The primary goal is to handle it professionally and promptly.

• Read the notice carefully to understand the exact reason for the discrepancy or query.
• Prepare all the documents requested by the department immediately.
• Respond to the notice within the stipulated time frame mentioned to avoid further complications or penalties.
• If you realize a genuine mistake was made while filing, correct it immediately and provide an explanation.
• If necessary, seek help from a CA (Chartered Accountant) or a tax professional to draft a robust and accurate response.

Why Notices Might Be Higher This Year

The crackdown on those making fake claims is more stringent this year compared to previous years. There has been a rapid increase in fraudulent refund cases in the last few years. While some people intentionally provide incorrect information to evade taxes, many others make a mistake without fully understanding the rules. In such a scenario, people from both categories—intentional fraudsters and those who made genuine errors—may be sent a notice for clarification.

Key Safety Measures for Taxpayers

If you are waiting for your refund, keep these points in mind:

• Always provide only correct information in your ITR. Honesty is the best policy.
• Keep all your documents (TDS certificates, investment proofs, rent receipts) safe and organized for at least 7-8 years.
• Check the status of your refund periodically on the e-filing portal.
• Strictly avoid any incorrect claim that you cannot substantiate with legal documents.

Conclusion

Waiting for a refund after filing the Income Tax Return is common. But if you have done everything honestly and correctly, there is no reason to worry. Even if the department’s scrutiny is taking longer, the genuine taxpayers will surely get what they are due in the end. Those who indulge in fraud, however, will face a notice and potential penalty from the Income Tax Department.

Detailed Frequently Asked Questions (FAQs)

1. How long does it usually take to receive an Income Tax Refund?

An Income Tax Refund usually gets processed within 4 to 5 weeks after the successful processing and verification of the ITR. However, due to increased scrutiny of fake claims this year, the processing time might be slightly longer than usual.

2. Is a refund guaranteed in every ITR filing?

No, a refund is not guaranteed in every ITR filing. It is only given to those taxpayers whose Tax Deducted at Source (TDS) or Advance Tax paid is more than their actual tax liability calculated on their total income for the financial year.

3. What steps should I take if my refund is significantly delayed?

If your refund is delayed beyond the typical processing time, you should first check the Refund Status on the official Income Tax e-filing portal. If the status shows “processed” but the money hasn’t been credited, ensure your bank account is correctly validated on the portal.

4. Why does the Income Tax Department specifically send a notice to a taxpayer?

The Income Tax Department sends a notice primarily to question or investigate discrepancies, incorrect information, or suspicion of a fake claim made in the ITR. Common reasons include mismatching income/TDS data (Form 26AS/AIS) or claiming ineligible deductions.

5. Does receiving an Income Tax Notice automatically lead to a penalty or fine?

No, receiving a notice does not immediately lead to a penalty or fine. The initial notice is generally for clarification and to request relevant documents. A penalty or fine is only imposed if the taxpayer fails to respond, ignores the notice, or if the investigation definitively proves tax evasion or willful misreporting.

6. Is it safer to file without claiming HRA if I only have informal rent receipts?

It is always better to claim only legitimate deductions that you can fully substantiate. If your rent receipts are informal or you cannot provide proof of rent payment (like bank statements), the department might flag the HRA claim, as it is a frequent target for fake claims.

7. Can the IT Department check my bank account details after I file my ITR?

Yes, through the Annual Information Statement (AIS), the IT Department has access to all your high-value transactions, interest from savings accounts, mutual fund transactions, and other crucial financial data provided by banks and financial institutions. This is used for cross-checking your ITR.