The Income Tax Department has recently begun sending SMS and email alerts to taxpayers regarding Assessment Year 2025-26, indicating that their Income Tax Return (ITR) refunds are on hold due to discrepancies found during the "risk management process". This has triggered confusion and anxiety among many taxpayers. The message typically advises taxpayers to file a revised return before December 31, 2025, to avoid further delays.

Understanding the "Risk Management Process"

The "risk management process" is an internal mechanism used by the Income Tax Department to flag returns that require additional verification. It is not a legal notice or scrutiny order. Returns are often flagged when the department's system detects mismatches or unusual patterns in high-value transactions.

Common reasons for refunds being flagged include:

• Mismatch with AIS/TIS/Form 26AS: Discrepancies between the income, TDS, or TCS amounts reported in the ITR and the information available with the Income Tax Department through the Annual Information Statement (AIS), Tax Information Summary (TIS), or Form 26AS.
• TDS/TCS mismatch: The TDS claimed in the ITR is higher than what appears in Form 26AS because the employer/bank hasn't deposited or corrected the data yet.
• AIS vs. ITR income mismatch: Interest, dividends, salary, or other income appears in the AIS but isn't fully reported in the ITR.
• High refund compared to past years: A sudden jump in the refund amount triggers risk checks, especially if the income pattern is similar.
• Deductions/exemptions claimed without adequate backing: Claims for deductions like HRA, 80C, 80D, or home loan interest that don't match available reporting.
• Employer correction pending: Mismatch created when an employer's revised TDS return is filed late, and the ITR was processed earlier.
• Multiple revised returns: Frequent revisions raise system flags.
• Wrong head of income: Incorrect classification of income, such as interest shown as "other income" vs. "business" or wrongly classified capital gains.
• Unusual or high refund claims.
• Inconsistency with past filing patterns.

Step-by-Step Guide to File a Revised ITR Online

If you have received an alert and identified a discrepancy, here’s how to file a revised ITR:

1. Login: Visit the official Income Tax e-filing portal (www.incometax.gov.in) and log in using your PAN/Aadhaar as your user ID and your password.
2. Navigate to e-File: Click on the 'e-File' menu, then click on 'Income Tax Return'.
3. Select Assessment Year and Filing Mode: Choose the relevant Assessment Year (2025-26). Select the mode of filing as 'Online'.
4. Choose Filing Type: Select 'Filing Type' as 'Original/Revised Return'.
5. Select Submission Mode: Choose 'Submission Mode' as 'Prepare and Submit Online'.
6. Select ITR Form: Choose the applicable ITR form number.
7. General Information Tab: In the online ITR form, under the 'General Information' tab, select 'Return Filing Section' as 'Revised return under section 139(5)' and 'Return filing type' as 'Revised'.
8. Enter Original Return Details: Enter the 'Acknowledgement Number' and 'Date of filing' of the original return.
9. Fill in the Details: Correct the discrepancies and enter all the relevant details in the online ITR form. Ensure all income, deductions, and exemptions are accurately reported. Compare ITR vs AIS + 26AS.
10. Submit and Verify: Submit the ITR and e-verify it for faster processing and quicker refunds. You can e-verify through Aadhaar OTP, Net Banking, or other available methods. Alternatively, send the ITR-V through normal or speed post to "Centralized Processing Center, Income Tax Department, Bengaluru-560500".

Important Considerations

• Deadline: The last date to file a revised ITR for Assessment Year 2025-26 is December 31, 2025.
• Genuine Claims: If your claims are genuine and correctly made, no action is required.
• No Limit on Revisions: There is no limit to how many times you can revise your return, but you cannot revise it after the assessment is complete under Section 143(3).
• Impact of Revised Return: The original ITR is completely replaced when you file a revised return.
• Updated Return: After January 1, 2026, you can file an updated return, but it may involve additional tax liabilities and penalties.
• Ignoring Discrepancies: Ignoring a genuine mismatch may lead to disallowance of claims and could trigger further scrutiny, potentially resulting in additional tax, interest, and penalties.

By taking prompt action and filing a revised ITR if necessary, taxpayers can ensure accurate reporting and avoid potential delays in their income tax refunds.