Filed your ITR before July 31? Here are 3 reasons the Income Tax Department may still send a notice

Filing your income tax return (ITR) before the 31 July deadline does not necessarily mean you are done with the Income Tax Department for the year. A return can be filed on time and still be flagged later if the information declared by the taxpayer does not match data available with the department.

The department can process the return, compare it with information available through tax statements and third-party reporting, and seek clarification where discrepancies are found. Here are three major reasons why a taxpayer who filed the ITR on time could still receive an income tax communication.

1. Your ITR does not match the income data with the tax department

One of the most common triggers is a mismatch between the income declared in the ITR and information available with the Income Tax Department.

The Annual Information Statement (AIS) contains information reported by various entities, including TDS and TCS details, specified financial transactions, tax payments and other information such as interest income, dividends and certain foreign remittances. The department itself says taxpayers should check the information available in AIS and report complete and accurate information in their return.

For example, a taxpayer may report only salary income but overlook interest earned on fixed deposits or savings accounts. Similarly, income from dividends, capital gains, rental property or other sources can be missed while filing the return.

A mismatch does not necessarily mean that the taxpayer has concealed income. AIS data can contain errors or duplicate information, and the department allows taxpayers to submit feedback on information displayed in AIS.

However, taxpayers should not assume that an item missing from AIS can simply be ignored. The department specifically states that AIS may not contain every transaction available to the taxpayer and that the taxpayer remains responsible for reporting complete and accurate information.

2. TDS or tax credit claimed in the ITR does not match Form 26AS

Another important reason is a mismatch in tax credits.

A taxpayer may claim a particular amount of tax deducted at source (TDS) in the ITR, while the amount appearing in Form 26AS or the department's records may be different. This can happen when an employer, bank or another deductor has reported incorrect information or has not yet filed or corrected its TDS statement.

The Income Tax Department has a specific tax-credit mismatch facility that allows taxpayers to compare TDS, TCS and other tax payments claimed in the return with the amounts available in Form 26AS. If the amounts differ, the portal identifies a tax-credit mismatch.

This is particularly relevant for taxpayers claiming a refund. For instance, if an employee claims ₹1 lakh of TDS in the return but the department's records show only ₹80,000, the processing of the return could result in an adjustment or a communication seeking clarification.

Taxpayers should therefore check Form 26AS and AIS rather than relying solely on the TDS certificate or information entered while filing the return.

3. Incorrect deductions, exemptions or other details can make the return defective

Filing the return before the deadline does not protect a taxpayer from errors in the return itself.

A return can be treated as defective when it contains incomplete or inconsistent information. The Income Tax Department says a defective return can lead to a notice under section 139(9). Such a notice is sent through the registered email address and can also be viewed on the e-filing portal.

Errors could include using an incorrect ITR form, leaving mandatory information incomplete or making claims that are not adequately supported by the information reported in the return.

Incorrect deductions and exemptions are another area that can attract questions, particularly where the claim is inconsistent with the taxpayer's income or supporting documents.

A taxpayer receiving a defective-return notice generally gets 15 days from the date of receiving the notice, or the period specified in the notice, to rectify the defect. An extension can also be requested in appropriate cases.

Taxpayers should regularly check the e-filing portal rather than relying only on email or SMS. The department's portal provides services to view filed returns, e-verify returns, access AIS and track proceedings.