Why Self-Filing With ChatGPT Could Still Get You an Income Tax Notice
- PRITI SIRDESHMUKH
- 6 days ago
- 9 min read
Self-filing income tax returns with the help of ChatGPT may appear convenient, but it carries risks that can quickly result in an income tax notice under the Income Tax Act, 1961. Generative AI tools provide general assistance but cannot fully ensure compliance with evolving tax rules, nor can they validate data against authoritative records like Form 26AS or AIS. Recent cases have shown that taxpayers relying solely on ChatGPT missed crucial disclosures or selected incorrect forms, leading to defective return notices within days of filing.
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Why Self-Filing With ChatGPT Can Trigger an Income Tax Notice
Filing income tax returns with the help of ChatGPT may look like a shortcut, but it comes with significant risks. While the tool can provide quick responses to tax-related questions, it lacks the ability to review official documents, cross-verify disclosures, or ensure compliance with the Income Tax Act, 1961. Automated systems of the Income Tax Department detect mismatches and missing details almost instantly, which can result in defective return notices, scrutiny under Section 143(1), or even further inquiries. The underlying issue is not ChatGPT itself, but its inability to substitute professional judgment and technical accuracy in tax filing.
Common Mistakes That Lead to Tax Notices
Common mistakes often become the primary reason taxpayers receive income tax notices, and many of these errors can be avoided with proper guidance. When individuals rely on ChatGPT or similar AI tools for self-filing, the risks increase because the system can only work with the information provided by the user. It cannot cross-check with official databases or prompt for missing details.
One of the most frequent issues is the failure to verify data in the Annual Information Statement (AIS) and Form 26AS. These documents contain details of tax deducted at source (TDS), tax collected at source (TCS), and other high-value transactions. If the return does not align with this information, the Income Tax Department’s automated systems quickly identify the mismatch, often resulting in a notice for clarification or correction.
Another common problem arises from choosing the wrong ITR form. Different forms apply to different income categories, and using an incorrect one makes the return defective. For example, reporting only salary income in ITR-1 while also having capital gains or property income leads to rejection under Section 139(9). This not only wastes time but also creates compliance stress.
Non-disclosure of certain types of income is another frequent trigger. Many self-filers overlook capital gains from mutual funds, rental income from a second property, or even foreign assets. The Income Tax Act mandates disclosure of these, and missing them can invite closer scrutiny from the tax department. Even small amounts of unreported income can generate a notice when flagged against information available in AIS.
Errors in bank account details also create unnecessary complications. An incorrect account number, IFSC code, or omission of interest income can delay refunds and raise suspicion of underreporting. Automated systems are designed to highlight such inconsistencies, which often forces the taxpayer to respond to a notice or file a revised return.
Each of these mistakes, whether big or small, can be picked up by the risk engines used by the Income Tax Department. The consequences range from receiving a notice for defective returns to penalties for non-disclosure. While AI tools like ChatGPT provide convenience, they cannot yet perform the compliance checks that professional review ensures, making self-filers more vulnerable to these avoidable errors.
Errors in Selecting the Right ITR Form
Choosing the wrong ITR form is one of the most common pitfalls in self-filing. ChatGPT cannot always determine which form suits a taxpayer’s income profile. For example, using ITR-1 despite having capital gains, multiple property incomes, or business income will immediately result in a defective return notice under Section 139(9). The error not only delays compliance but may also lead to re-filing within a limited timeframe. Platforms like TaxBuddy actively guide users in choosing the correct ITR form, ensuring such avoidable mistakes are prevented.
Mismatches in TDS, AIS, and Bank Records
Every income entry in the return is cross-checked against TDS and TCS records, as well as bank-reported data in AIS. Even small mismatches between declared income and official records can lead to intimation notices. For instance, if interest income from a savings account is omitted or if TDS credits are incorrectly claimed, the discrepancy is automatically flagged. ChatGPT does not have access to these official systems, making it easy for such mismatches to slip through unnoticed. Professional assistance ensures alignment with official records before filing.
Unreported Income and Assets Under the Income Tax Act
The Income Tax Act mandates disclosure of all income sources and certain assets, including foreign bank accounts, mutual funds, and immovable property. Self-filing with ChatGPT often results in missed disclosures because the tool only works with the input provided. If the taxpayer forgets to mention an income source, it goes unreported. Unreported capital gains, family-held investments, or overseas income are common triggers for notices. The penalty risks are higher in such cases, and professional oversight is essential to ensure compliance.
Risks of Depending Solely on ChatGPT for ITR Filing
Relying only on ChatGPT creates a false sense of security. The tool is designed for conversation, not regulatory compliance. It cannot:
Check deadlines and compliance timelines.
Validate form selection and annexures.
Account for recent CBDT notifications or rule changes.
Review AIS, Form 26AS, or pre-filled forms available on the official portal.
This means critical compliance checks are bypassed, increasing the likelihood of notices, penalties, and extra work after filing.
How Recent Cases Highlight the Pitfalls of AI-Only Filing
A case reported in August 2025 highlighted how a tech-savvy professional used ChatGPT to file returns but failed to include short-term capital gains reported in his AIS. Within days, he received a defective return notice under Section 139(9). Such cases underline the limitations of relying solely on AI for compliance-heavy tasks. Experts have noted that ChatGPT is not designed to reconcile official data sources or interpret dynamic legal provisions, making self-filers vulnerable to quick red flags.
Expert Insights on Safe Income Tax Filing
Chartered accountants and tax professionals stress that AI can be helpful for basic awareness but not for end-to-end filing. Filing requires judgment, reconciliation of multiple documents, and knowledge of legal nuances. Experts recommend reviewing AIS, Form 26AS, bank records, and matching them against the return before submission. Errors, even when small, are enough to draw notices from the tax department. This is why guided filing platforms are seen as the safer option.
Why Professional Assistance with Platforms Like TaxBuddy Matters
Platforms like TaxBuddy combine AI-driven automation with professional review, addressing the gaps that ChatGPT cannot fill. From suggesting the correct ITR form to verifying AIS and Form 26AS data, TaxBuddy ensures error-free filing. More importantly, if a taxpayer does receive a notice, the platform provides post-filing support to decode the notice and respond appropriately. This combination of technology and expertise significantly lowers the risk of defective returns or scrutiny.
Conclusion
Self-filing with ChatGPT can appear efficient but leaves taxpayers exposed to compliance risks, mismatches, and notice triggers. While AI is a valuable assistant, it cannot yet replace the precision of expert oversight. For anyone looking for assistance in tax filing, it is advisable to download theTaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options? TaxBuddy provides flexibility to taxpayers by offering both self-filing and expert-assisted plans. Those confident in handling simple returns can use the self-filing option, which is supported by an intuitive interface and automated checks. On the other hand, individuals with multiple income sources, capital gains, or complex tax scenarios can choose expert-assisted plans, where chartered accountants review documents, prepare the return, and ensure accuracy. This dual approach ensures that both first-time filers and seasoned taxpayers have solutions suited to their needs.
Q2. Which is the best site to file ITR? The official Income Tax Department portal is always available for direct filing, but many taxpayers prefer platforms that combine ease of use with professional guidance. TaxBuddy is widely regarded as one of the best options because it integrates AI-driven automation with expert review. Unlike DIY-only platforms, it also provides notice handling, compliance assistance, and post-filing support, which makes it particularly valuable for those who want a smooth and secure filing experience.
Q3. Where to file an income tax return? An income tax return can be filed directly on the government’s e-filing portal, which is free of cost but requires complete awareness of forms and disclosures. Alternatively, private platforms like TaxBuddy offer guided filing, where both self-filing and expert-assisted options are available. This helps taxpayers avoid mistakes such as incorrect ITR form selection or missed disclosures that might result in notices. For those seeking convenience and peace of mind, professional platforms are a practical choice.
Q4. What are the common errors that trigger notices when filing with ChatGPT? When relying on ChatGPT for self-filing, errors usually stem from incomplete inputs or lack of cross-verification. Common mistakes include choosing the wrong ITR form, failing to disclose capital gains or rental income, mismatched entries between returns and Form 26AS, and errors in reporting bank interest. Since ChatGPT does not review official tax documents, it cannot catch these discrepancies, which are quickly flagged by the Income Tax Department’s automated systems.
Q5. How can TaxBuddy assist with notices resulting from self-filing? If a notice is received due to mistakes in self-filing, TaxBuddy provides step-by-step assistance. Users can upload their notice directly on the platform or app, where experts analyze the issue, explain the reason for the notice, and prepare an appropriate response. In cases where revised returns are required, TaxBuddy ensures they are filed correctly within deadlines, reducing penalties or further scrutiny. This service is particularly helpful for individuals unfamiliar with complex compliance procedures.
Q6. What should be checked before filing returns with AI tools? Before filing with AI-based tools, taxpayers should manually verify important records. This includes cross-checking data from the Annual Information Statement (AIS), Form 26AS, and TDS certificates to ensure all income sources are covered. Correct ITR form selection is essential, as is entering accurate bank account details for refunds. It is also important to include income from multiple properties, capital gains, or investments abroad, as these are often overlooked during self-filing with AI.
Q7. Is it possible to correct errors after receiving a notice for returns filed with ChatGPT? Yes. If errors are detected after filing, revised returns can be filed within the timelines permitted under Section 139(5) of the Income Tax Act. For defective return notices under Section 139(9), corrections must be made within the period specified in the notice. Taxpayers may also need to provide additional documentation or explanations when responding. Platforms like TaxBuddy streamline this process by guiding taxpayers on how to amend returns and resolve issues efficiently.
Q8. How does the TaxBuddy app help avoid or resolve income tax notices? The TaxBuddy mobile app is designed to minimize errors and handle notices seamlessly. It enables users to file returns with built-in compliance checks, upload notices for expert review, and track the status of responses in real time. The app also provides access to professional support for drafting replies and filing revised returns. This combination of technology and expertise helps taxpayers avoid common pitfalls that lead to notices and ensures quick resolution when issues arise.
Q9. What types of mismatches are most likely to trigger income tax notices when self-filing? The most frequent mismatches involve discrepancies between the return filed and the data in Form 26AS or AIS. Examples include underreporting of bank interest, overstating TDS claims, or not disclosing mutual fund redemptions. High-value transactions such as property purchases or foreign investments, if left unreported, are also likely to attract scrutiny. Since these mismatches are automatically flagged by risk-based engines, even small discrepancies can generate an income tax notice.
Q10. Can bank account details in ITR forms affect notice risk? Yes. Incorrect or incomplete bank account details can cause problems beyond delayed refunds. If the details submitted in the return do not match with the information available with banks or the Income Tax Department, the system may generate an automated query or notice. For example, failure to include interest income from a savings account associated with the PAN could trigger a mismatch. Accurate reporting of account numbers, IFSC codes, and interest income is crucial.
Q11. How does selecting the wrong ITR form increase audit or notice risk? Using the wrong form is one of the easiest ways to attract notice. For instance, selecting ITR-1 despite having capital gains, business income, or foreign assets makes the return invalid. The Income Tax Department’s system quickly identifies these errors, resulting in a defective return notice under Section 139(9). If not corrected within the specified time, the return may be treated as not filed at all, which can lead to penalties and compliance complications.
Q12. Does ChatGPT prompt for additional supporting documents during self-filing? No. ChatGPT operates based on the information entered by the user and cannot access or verify official records. It does not prompt for supporting documents such as AIS, Form 26AS, TDS certificates, or bank statements, which are crucial for accurate filing. If the taxpayer forgets to disclose a source of income, ChatGPT will not remind them, increasing the likelihood of omissions that result in notices. This is where platforms with built-in document integration, like TaxBuddy, provide a clear advantage.
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