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Income Tax Department sending notices to taxpayers who have claimed wrongful refunds, requiring them to repay the full amount with penalty. CPC processing an ITR does not guarantee that the refund is fully yours and cannot be taken back, the Income Tax Department can recover erroneous amounts via n
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FAQ :
Yes, the Income Tax Department can recover erroneous amounts if a refund was claimed based on invalid deductions or misreported income, even after processing.
If you receive a notice, you may have to return the full refund amount plus additional tax penalties. Using the ITR-U form can result in penalties ranging from 25% to 70% depending on how late you file.
Common reasons include claiming bogus deductions (like Section 80GGC or HRA without proof), misreporting income (underreporting capital gains, false expenses), or system mismatches identified through Form 26AS or AIS.
ITR-U stands for Updated Return, which allows you to voluntarily correct errors in your previously filed tax return. It's used when you've missed the deadline for filing a revised return and involves paying additional tax and penalties.
For Assessment Year 2025-26 (relating to FY 2024-25), the deadline to file a revised return is 31st December 2025.
Filing a revised return within the deadline typically does not incur penalties, although interest may be charged on any additional tax due. Missing this deadline may require using the costlier ITR-U options.
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