Understanding I-T Department's Intimations on Property Deals, Foreign Assets, and AIS Mismatches

On December 18, 2025, at 5:58 PM, the Income Tax Department (ITD) announced that they have received references regarding recent communications sent to taxpayers about their transactions. These communications are part of an automated system designed to inform taxpayers about discrepancies in their financial records.

The ITD is referring to the automated intimations via email being sent to many taxpayers about AIS mismatch, property transactions, foreign income, foreign assets, car purchases, and other significant financial activities. The department stated: “Taxpayers may please note that such communication is to facilitate the taxpayers and make them aware of the information available with the ITD regarding the transactions reported by the Reporting Entities during the year.”

The tax department further explained that these communications are purely advisory and are sent only in cases where there is a noticeable gap between the disclosures in the Income Tax Return (ITR) and the information received from Reporting Entities. The primary objective of these communications is to provide an opportunity for taxpayers to voluntarily correct any discrepancies by reviewing their AIS and, if necessary, revising their returns already filed or filing belated returns if they haven't done so yet.

The last date for revising or filing a belated return for Assessment Year 2025-26 is December 31, 2025. Taxpayers are encouraged to respond promptly via the Compliance Portal if discrepancies exist or to ignore the communication if their filings are correct.

For instance, if an ITR is filed on September 16, 2025, which falls within the extended due date for non-audit taxpayers for Financial Year 2024-25, the Centralised Processing Centre (CPC) is statutorily required to process the return and issue an intimation under Section 143(1) of the Income-tax Act, 1961, within 9 months from the end of the financial year in which the return is filed. Chartered Accountant Suresh Surana explained to ET Wealth Online that the statutory time limit for processing the return would expire on December 31, 2026.

Surana clarified that the fact that the ITR was filed on September 16, 2025, within the extended due date, does not affect the statutory processing timeline. The 9-month period commences from March 31, 2026, the end of the financial year in which the return was filed, and not from the actual date of filing. Consequently, irrespective of whether the return was filed on July 31, 2025, September 16, 2025, or even by the belated return deadline of December 31, 2025, the CPC has until December 31, 2026, to process the return and issue the intimation under Section 143(1).

If any ITR is not processed on or before December 31, 2025, and any error or omission is found in the ITR, the taxpayer has limited options. For Assessment Year 2025-26, the statutory time limit for filing a revised return under Section 139(5) expires on December 31, 2025. Once this date has passed, a taxpayer can no longer revise the return to correct errors or omissions, even if the return has not yet been processed by the CPC.

However, if the income tax return (ITR) is subsequently processed under Section 143(1) and the taxpayer receives an intimation pointing out an apparent mistake, the law provides an alternative remedy. In such cases, the taxpayer may file an application for rectification under Section 154. Rectification is permitted for mistakes apparent from the record, such as arithmetical errors, incorrect carry-forward of losses, wrong tax or interest computation, mismatch of TDS credits, or other clerical inaccuracies reflected in the CPC intimation.

A rectification request under Section 154 can be filed electronically through the Income-tax e-Filing Portal and must generally be made within 4 years from the end of the financial year in which the intimation under Section 143(1) is passed. Importantly, rectification proceedings are limited in scope and cannot be used to make fresh claims, introduce new income or deductions, or address debatable issues of law that were not part of the original return.

Accordingly, where the time limit for filing a revised return has expired, taxpayers should carefully review the intimation issued by the CPC and, where the error qualifies as a mistake apparent on record, seek correction through Section 154 rectification. Issues beyond the scope of rectification would need to be pursued through appropriate appellate remedies under the IT Act, subject to applicable timelines.

In summary, the ITD's recent intimations aim to help taxpayers identify and correct discrepancies in their financial records. Taxpayers should review these communications carefully and take appropriate action within the specified timelines to avoid any legal complications.