Income-tax returns: Got a notice or is your ITR refund paused due to error in tax filing? Here's what to do next

Income-tax refunds are issued when the tax paid exceeds the actual liabilities after deductions. It is processed after ITR e-verification, and most taxpayers receive their refund within five weeks of filing returns.

So, in case your refund has not yet been credited into your linked bank account and you have been sent a notice from the tax department regarding discrepancies or mismatch in your ITR filing. Here's what to do next…

Generally, an I-T notice is official communication from the tax department regarding unreported income, mismatch or discrepancies in your filing, non-filing of returns, verification of claims, missing information or overdue filing, and demand for outstanding income tax among other reasons. Receiving one (before or after filing taxes) does not automatically mean you are in trouble.

Below are the various types of I-T notices that may be sent:

• Section 133(6): Inquiry for no ITR despite AIS showing taxable income, capital gains
• Section 142(1): Inquiry before assessment
• Section 143(1): Intimation letter
• Section 143(2): Notice for scrutiny of assessment
• Section 148: Notice for escaping assessment
• Section 245: Demand notice for taxpayer

What is mismatch in ITR filing?

According to Clear Tax, tax notices can also arise from arithmetic errors, unreported high-value transactions, non-disclosures, or inconsistent information across years. The Department is now comparing current ITRs with previous filings as well.

Further, the form 26AS (form 168 under the new Income Tax Act, 2025) or Annual Information Statement (AIS), is a comprehensive display of your financial statement for the year, including TDS, TCS, specified financial transactions (SFT), high-value transactions done via credit card and all PAN-affiliated financial transactions. Thus, anything you forget or fail to report in your returns will show on the document regardless. It is this mismatch that the tax department can ask you to correct.

Got a notice for mismatch / corrections? Do THIS

• Step 1: Verify if the tax notice is genuine

It is advisable to first verify the authenticity of a notice before you respond. This can be easily done through the authentication feature on the official income-tax e-filing portal here (https://www.incometax.gov.in/iec/foportal/).

You will need to keep your PAN Card, tax documents, Document Identification Number (DIN), and phone ready for the process.

• Step 2: Assess the notice and respond promptly

Once you have verified that the notice is legitimate. Read the notice carefully to understand what documentation you need to provide, respond promptly and avoid penalties. Documents and related records that may be required include your bank statements, Form 16, investment proof, ID proof, transaction details, etc.

You will have to login to your account on the I-T portal and click on Pending Action, followed by e-Proceedings to check the notice and provide an explanation with the required supporting proof documents.

Once you submit your reply, the acknowledgement can be download to your device for future reference and proof.

• Step 3: Correct mismatch in ITR

To do so you will have click on the “e-Verification” tab on the e-filing portal and can reconcile mismatches directly without the need for additional documents.

Further, taxpayers who are unable to explain mismatches may choose to submit an Updated Income Tax Return if eligible.

CBDT conducts outreach programmes

Meanwhile, Central Board of Direct Taxes (CBDT) Member Pallavi Agarwal on Monday said the tax department has organised 304 outreach programmes across India since April 2026.

Speaking at the Bangalore Chamber of Industry and Commerce conference on the new Income Tax Act and Rules, Agarwal said this was done to familiarise taxpayers, professionals and other stakeholders with the Income Tax Act, 2025, the Income Tax Rules, 2026, and the redesigned tax forms, PTI reported.

• On the reforms, the official said that over 1.32 crore updated returns had been filed over the past four years, resulting in ₹16,083 crore in additional tax payments under the Department's NUDGE (Non-Intrusive Usage of Data to Guide and Enable) campaign.
• According to a statement, for AY27 / FY26, more than 97% of ITR-1 and over 95% of ITR-2 returns were filed under the new regime.
• There were 49 lakh first-time filers by 31 July 2026.
• Of the returns furnished up to 31 August 2026, 2.54 crore, or 32.48%, were processed within one day of filing, while refunds were issued for around 65 lakh returns, it added.

Disclaimer: This story is for educational purposes only. We advise investors to check with certified experts before making any investment decisions.