Income Tax Refund Put on Hold? Here’s Why Genuine Taxpayers Are Getting Alerts

Many people in India were expecting their income tax refund as usual. Suddenly, they got an SMS or email saying their refund has been “put on hold under the risk management process.” This sounds scary, but in most cases it’s not a big problem.

What does this message really mean?

• The Income Tax Department uses a computer system to randomly or automatically double-check some returns.
• Your return has been flagged for checking, not necessarily because you did anything wrong.

Over the last few years, the tax department has created systems that cross-check the income and details you mention in your tax return with information it already receives from other sources like your employer, banks, mutual funds, and similar institutions.

This information comes to the department through documents such as Form 16, Form 26AS, and the Annual Information Statement (AIS). If the system finds any difference between what you have reported and what these records show, your tax refund is temporarily put on hold so the return can be checked properly before the money is paid out.

Why Honest Taxpayers got the message?

Many people feel anxious after getting these alerts because they believe they haven’t done anything wrong and in many cases, they’re right.

Sometimes, mismatches happen for honest reasons. For example, an employer may reject a tax-deduction claim because some documents were missing or submitted late. Even so, a taxpayer is still allowed to claim that deduction later when filing their tax return, as long as they have proper proof.

The problem is that the system compares the employer’s records with the tax return. If the two don’t match, it automatically flags the difference. This can lead to a refund being put on hold, even when the deduction is completely valid.

This shows the limits of automated systems. They are good at spotting differences in numbers, but they can’t understand the full situation or judge whether someone acted honestly or not.

Responsibility of Taxpayer to review

If your tax refund has been put on hold, you should check your tax return and correct it, if needed, before December 31, 2025.

If you miss this deadline, it can cause serious problems. After December 31, 2025, you won’t be able to revise your return to claim a refund. You’ll only be allowed to file an updated return, which does not let you get a refund.

Reasons the message was misunderstood

Many taxpayers are getting worried because the alert they receive does not explain what the problem actually is. It only says there is a “mismatch”, without telling whether it is a small issue or something serious. This leaves people guessing and feeling stressed.

Most salaried employees depend on their employer or a tax consultant to file their returns, so when they get such a message with no details, they don’t know what steps to take. Chartered accountants say that many of the calls they receive are due to panic rather than real mistakes, and in many cases, the problem is just a small difference in TDS details or interest income, which can be easily corrected.

What typically causes a refund to be delayed?

Tax experts say refunds are commonly flagged due to the followings reasons:

1. Differences between Form 16 and income reported in the return

2. TDS credits in Form 26AS not matching the return

3. Interest income appearing in AIS but missing from the return

4. Refund amounts that appear high relative to salary income

5. Even small errors can trigger a pause.

What Should Taxpayers do?

Taxpayers who receive the alert should act carefully rather than panic and must consider the followings steps:

1. Log in to the income tax portal and compare the filed return with Form 16, Form 26AS and the Annual Information Statement.

2. If the mistake is actually yours, you should fix it by sending in a corrected tax return before the deadline.

3. If the mistake came from your employer giving wrong information, you should ask them to correct it.

Experts warn that if you just ignore the message, it could slow down your refund even more or make the problem harder to fix later.