Many high-income salaried employees are receiving Income Tax intimations, asking them to correct discrepancies. Tax experts say that even in the previous years, the tax department had sent similar notices to employees and their employers, prompting them to take action suo-moto.
“The tax department has sent notices to senior executives where discrepancies have been observed. We understand that the issue may relate to either claims of exemptions and deductions or under-reporting of income or missing to report certain foreign assets. The notices intend to nudge the taxpayers to revise their tax returns with the corrected reporting’s before the tax authorities initiate action,” an tax expert said.
Reasons for Income Tax Notices
The Income Tax Department has recently intensified data verification using information available through systems like the Annual Information Statement and other third-party reporting channels. “As the department reconciles taxpayer filings with financial data reported by banks, employers, and other institutions, mismatches or unreported income may trigger notices,” another tax expert said.
Experts also suggest taxpayers might have received mail under the Income Tax Nudge intimations, an informal intimation, not a formal income tax notice with a Document Identification Number (DIN) number. It simply prompts you to review and correct any potential errors in your ITR. If your declared income and assets are accurate and you have no undisclosed items, no action is required unless you receive an official notice with a DIN number.
Another tax expert, “Many notices are being triggered due to differences between income reported in the return and figures appearing in Form 26AS or AIS, incorrect reporting of stock-based compensation such as ESOPs, and non-disclosure of foreign assets or overseas income. In some cases, inconsistencies in exemption claims such as HRA or LTA may also lead to scrutiny.”
What should you do when you get a notice?
The first step is to determine whether it is a formal tax notice or an intimation under the Nudge initiative. “The taxpayer should patiently take a set of printouts, check its authenticity on the ‘Authenticate Notice’ page of the income tax website, read it thoroughly, and take corrective measures on priority. If required, they may take extra time by filing a request to respond appropriately. If the situation warrants, they should not hesitate to seek a tax professional’s advice,” another tax expert said.
“If there is a genuine mismatch, taxpayers may need to submit an online response or file an updated return through the Income Tax portal. It is advisable to respond within the specified timeline to avoid further escalation,” he said.
Maintaining proper records such as TDS certificates, exchange statements and transaction logs is also important, as these documents can help substantiate claims if any dispute or litigation arises.
Separately, the income-tax department has cautioned taxpayers about fraudulent emails circulating online that falsely claim to be issued for Assessment Year 2025–26 and ask recipients to click on a link to view a ‘Assessment Order’ or pay. Authorities said the email and the attached order are fake and were not issued by the department.
