ITR Filing 2025: Income Tax Dept Launches ‘TAXASSIST’ To Flag Incorrect Claims

As the income tax filing season for Assessment Year 2025–26 gains momentum, the Income Tax Department has introduced a new support service called ‘TAXASSIST’ to help taxpayers respond to notices and clarify queries. This launch comes amid a broader push to use artificial intelligence (AI) and data analytics to detect errors and fraudulent deductions in tax returns.

Why is the Income Tax Department Adopting AI-Powered Checks?

The department is intensifying its use of technology to scrutinise Income Tax Return (ITR) filings. AI tools now scan tax returns for mismatches, particularly focusing on deduction claims that seem suspicious. These are verified against third-party data received from banks, mutual funds, employers, and other financial institutions.

For example, deductions under Section 80GGC are sometimes wrongly claimed by businesses. Such mistakes are being flagged automatically. Taxpayers who have made such errors are advised to file a revised or updated return (ITR-U) and pay any dues to avoid penalties.

How Does TAXASSIST Work?

Using tools like the Annual Information Statement (AIS) and Statement of Financial Transactions (SFT), the system cross-checks taxpayer declarations with digital data from various financial sources. If discrepancies are found, the system generates notices asking taxpayers to provide supporting documents or explanations.

Failure to respond or correct the return may lead to tax demands, interest, or even legal proceedings.

What is the Role of TAXASSIST?

‘TAXASSIST’ is a guidance and resolution platform designed to help taxpayers handle these notices and get clarity on deduction rules, errors, and filing processes. It aims to reduce confusion and encourage voluntary compliance.

Taxpayers can use this service to understand why they received a notice, how to respond, and whether they need to revise their return.

Read more: ITR Filing 2025: How to Pay Zero Tax on ₹15.5 Lakh Annual Income

Conclusion

With AI tightening checks and 'TAXASSIST' offering support, the Income Tax Department is balancing compliance enforcement with taxpayer assistance, promoting a smarter, more transparent filing environment. The deadline to file ITR for AY 2025–26 is September 15.

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