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As the deadline for filing Income Tax Returns (ITR) approaches, tax experts are urging taxpayers not to wait until the last moment. The last date to file ITR for most salaried individuals and non-audit taxpayers is July 31, 2026. Experts warn that rushing to file returns at the final hour often leads to mistakes that may attract scrutiny from the Income Tax Department.

With the tax department increasingly using Artificial Intelligence (AI) and advanced data analytics to verify returns, even small discrepancies can now be detected more easily. Incorrect income details, fake deductions, mismatched TDS information, and unreported high-value transactions are among the top reasons why taxpayers may receive an income tax notice.

Why Filing ITR Carefully Has Become More Important

The Income Tax Department now cross-checks data from multiple sources including:

• Form 16
• AIS (Annual Information Statement)
• TDS records
• Bank transactions
• Mutual fund investments
• Property and capital gains data

If any mismatch is found between your ITR and official financial records, the department may issue a notice seeking clarification.

Tax professionals say taxpayers should review every detail carefully before submitting returns to avoid penalties, scrutiny, and delays in refunds.

1. Incorrect Income Details Can Trigger Notice

One of the most common reasons for receiving an income tax notice is reporting incorrect income.

Taxpayers must properly calculate all sources of income before filing returns. This includes:

• Salary income
• Interest earned from bank deposits
• Capital gains from shares or property
• Freelance or business income
• Rental income

Experts recommend verifying information using Form 16, AIS, and bank statements before filing returns.

If the income declared in the ITR does not match the information available with the Income Tax Department, the chances of receiving a notice increase significantly.

2. Wrong Deduction Claims May Create Problems

Many taxpayers claim deductions to reduce their tax liability under the old tax regime. However, claiming deductions without valid proof can become risky.

The Income Tax Department may ask taxpayers to provide supporting documents for deductions claimed under sections such as:

• Section 80C
• Section 80D
• Home loan benefits
• Education loan interest

Experts advise taxpayers to claim only those deductions for which they are genuinely eligible and maintain proper documentation as evidence.

3. Fake HRA Claims Can Lead to Scrutiny

House Rent Allowance (HRA) claims help salaried employees reduce taxable income. However, fake HRA claims have become a major area of scrutiny for tax authorities.

To claim HRA benefits properly, taxpayers must provide:

• Landlord’s PAN details
• Rental address
• Rent receipts
• Valid rental agreement, if required

Using fake rent receipts or incorrect landlord details may result in an income tax notice and further investigation.

4. TDS Mismatch Is Another Major Reason

Mismatch in TDS details is another common issue that may trigger notices.

Sometimes employers deduct TDS but fail to deposit it properly or file incorrect returns. As a result, the TDS shown in Form 16 may not match the department’s records.

Before filing ITR, taxpayers should carefully verify:

• Form 16
• Form 26AS
• AIS statement

If any mismatch is found, employees should immediately contact their employer or deductor to get corrections made.

5. Not Reporting High-Value Transactions

The Income Tax Department closely monitors high-value financial transactions. Failing to disclose such transactions in ITR can invite scrutiny.

Some major transactions that taxpayers should report include:

• Cash deposits above ₹10 lakh in a financial year
• Credit card spending above ₹2 lakh
• Mutual fund investments above ₹2 lakh
• Large property transactions
• High-value stock market gains

The department receives transaction details directly from banks and financial institutions, making it easier to identify unreported activities.

AI Technology Making Tax Checks More Advanced

Tax experts say the department’s increasing use of AI-powered systems has made return verification more accurate and faster than before.

Advanced technology now helps authorities detect:

• Income mismatches
• Fake deduction patterns
• Unusual financial activity
• Suspicious refund claims
• Hidden investments

This means taxpayers must be extra cautious while filing returns this year.

Tips To Avoid Income Tax Notices

Experts recommend following these simple steps while filing ITR:

• File returns well before the deadline
• Match income details with AIS and Form 26AS
• Verify TDS entries carefully
• Keep all deduction documents ready
• Report all sources of income honestly
• Avoid fake deduction or HRA claims
• Disclose high-value transactions properly

Belated Filing May Also Increase Risk

Tax consultants also warn that late filing increases the chances of mistakes and penalties. Apart from notices, delayed filing may lead to:

• Late filing fees
• Interest under tax laws
• Delayed tax refunds
• Loss of certain tax benefits

Taxpayers are therefore advised to complete their ITR filing process early and carefully to avoid unnecessary complications later.

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