The Income Tax Department recently sent advisory messages to numerous taxpayers regarding their financial transactions and filings. These communications, delivered through SMS and email, aim to help people voluntarily review and correct their income tax returns. Moreover, the department emphasized these messages are not punitive notices or legal actions.
Furthermore, the alerts relate to discrepancies between taxpayer disclosures and information received from reporting entities. The department wants to encourage voluntary compliance before proceeding with any enforcement checks.
Why Taxpayers Received These Messages?
The communications typically relate to several key issues:
| Issue Type | Description |
|---|---|
| AIS Mismatches | Differences between filed returns and Annual Information Statement |
| Unreported Transactions | High-value activities not shown in ITR |
| Foreign Assets | Undisclosed foreign income or property |
| Fraudulent Claims | Incorrect deductions for donations or other claims |
Additionally, the department receives data from foreign jurisdictions under international agreements like CRS, FATCA, and AEOI. Consequently, they can identify unreported foreign assets or income.
What Taxpayers Should Do Now?
If you received such a message, follow these steps:
Immediate Actions:
- Log into the Income Tax portal at incometax.gov.in
- Check your Annual Information Statement (AIS)
- Review your Taxpayer Information Summary (TIS)
- Compare this data with your filed ITR
Subsequently, you have several options based on what you find:
- If discrepancies exist: File a revised return or provide feedback through the Compliance Portal
- If you haven’t filed yet: Submit a belated return before December 31, 2025
- If everything is correct: No action needed; simply ignore the message
Foreign Assets Reporting Requirements
Importantly, all resident taxpayers must report foreign assets in their ITR. These include:
Common Foreign Assets:
- Bank accounts in foreign countries (even dormant accounts)
- Property outside India
- Foreign shares and mutual funds
- RSUs and ESOPs from foreign employers
- Insurance policies purchased abroad
- Cryptocurrency or digital assets
- Pension or retirement benefit accounts
- Signatory authority in foreign accounts
Moreover, you must report these assets regardless of whether they generated income. The reporting requirement applies even if you paid taxes abroad or purchased the asset years ago.
Critical Deadlines and Penalties
The last date to file a revised or belated income tax return for Assessment Year 2025-26 is December 31, 2025. This deadline is crucial because after this date, you cannot update or correct your return.
Penalty Structure:
| Violation | Penalty Amount |
|---|---|
| Non-disclosure of foreign assets | Up to ₹10 lakh |
| Undisclosed foreign asset under Black Money Act | 30% of asset value as tax |
| Serious cases | Possible prosecution |
Therefore, taxpayers should act promptly to avoid these consequences.
Who Must File Revised Returns?
Salaried individuals who received ESOPs, RSUs, or bonus shares from foreign employers must file revised returns if they missed reporting these items. Similarly, anyone holding foreign bank accounts needs to disclose them, even without income generation.
Use the correct ITR form, typically ITR-2 or ITR-3 for foreign assets, not ITR-1 or ITR-4. Additionally, complete Schedule FA separately from Schedule AL.
In conclusion, the Income Tax Department encourages taxpayers to respond promptly through the Compliance Portal if discrepancies exist, helping maintain accurate tax records before the December 31 deadline.
