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Beware of Income Tax Refund Scams: Stay Safe, Stay Smart

RBL Bank Oct 31, 2025

Imagine receiving a message saying a tax refund is due, and your heart skips a beat. But before you get excited, think twice; this could be a scam. Income Tax Refund Frauds are on the rise in India, and even careful taxpayers can be targeted. Knowing how these scams work can help you protect your money and personal information.

What is an Income Tax Refund Scam?

An Income Tax Refund Scam is a type of fraud where scammers impersonate officials from the Income Tax Department. Their primary goal is to deceive taxpayers into revealing personal and financial information under the guise of a pending tax refund or an error in tax filings.

These scams are particularly dangerous because they appear legitimate. The messages often mimic official communication channels, making it difficult for the average person to immediately recognise the fraud. Even careful individuals can be tricked if the communication looks professional or official.

How the Scam Works

Here’s a step-by-step explanation of how these scams target taxpayers:

  • Fraudulent Messages: Victims may receive SMS, email, or instant messages claiming that a tax refund is due, an income tax payment was inaccurate, or there has been an error in their tax filing. Such messages are designed to create urgency and fear.
  • Fake Links or Apps: The message may contain a link resembling the official Income Tax e-filing portal or ask the taxpayer to download an APK file disguised as the official app.
  • Phishing Websites: Clicking the link or installing the fake app directs the taxpayer to a fraudulent website that mimics the government portal. Victims are asked to provide sensitive banking and personal information.
  • Follow-up Calls: To reinforce the deception, scammers may call the victim, insisting they share more details or install apps to “resolve” the issue.
  • Financial Loss: Once the scammers obtain the information, they can initiate unauthorised transactions or misuse personal details for further fraudulent activity.

Read More: Stay Alert: Protect Yourself from Phishing Fraud

Red Flags to Watch Out For

Being aware of common warning signs can help you avoid falling victim:

  • Unexpected messages claiming urgent tax refunds or errors.
  • Links or apps that do not match official Income Tax Department websites.
  • Requests to share sensitive information like OTPs, bank account details, or passwords.
  • Calls insisting on immediate action, creating unnecessary panic.

Even if a message looks official, it’s important to pause and verify before taking any action. Scammers rely on the pressure of urgency to make victims act without thinking.

Read More: Tips for Identifying Genuine Bank Communications

Precautionary Measures for Taxpayers

Here are actionable steps to safeguard yourself:

  • Verify Official Communication: The Income Tax Department never calls or sends messages for tax refunds. Always cross-check any tax-related message, email, or call using official sources such as the Income Tax Department website or official helplines.
  • Do Not Share Personal Information: Avoid sharing bank account details, passwords, OTPs, or PAN information over calls, messages, or emails.
  • Check the Caller’s Identity: Independently verify any suspicious call. For international calls displaying an Indian number or no number, report it on the DoT Sanchar Saathi portal or call toll-free 1800 110 420 / 1963.
  • Report Cyber Fraud: Immediately report any suspicious activity to the cybercrime helpline (1930).
  • Alert Your Bank: Notify your bank immediately if you suspect unauthorised transactions or breaches. Banks can block transactions and provide guidance on further action.
  • Educate Family and Friends: Scammers often target the elderly or less digitally aware individuals. Sharing awareness with family and friends is an effective way to prevent fraud.

Read More: Stay Safe Online: Simple Tips to Avoid Cybercrime

Real-Life Examples

Several Indian taxpayers have fallen prey to such scams. For instance, some received WhatsApp messages claiming a refund from the Income Tax Department. When they clicked the link, they unknowingly shared sensitive banking credentials, leading to unauthorised transactions from their accounts.

In another example, a taxpayer received a call claiming there was an error in their tax filing. Pressured to install a “resolving app,” they entered personal information, which was later used to siphon funds. These incidents highlight how scammers exploit trust and urgency.

If you have accidentally shared personal or banking information with a fraudulent social media account, take action immediately:

If you are an RBL Bank customer:

You can also report cyber frauds to national authorities:

  • Visit the National Cyber Crime Reporting Portal: cybercrime.gov.in
  • Call the Cyber Crime Helpline: 1930

Fraudsters sometimes follow up with calls pretending to be from the bank. If you receive such calls:

  • Report them via the DoT Sanchar Saathi portal: sancharsaathi.gov.in
  • Alternatively, call the toll-free helpline: 1800 11 0420 or 1963
National Cybercrime Reporting Portal
sancharsaathi

Conclusion

The Income Tax Refund Scam serves as a reminder that cybercriminals can be highly sophisticated, but awareness is the best defence. Indian taxpayers should remain vigilant, verify all communication, and never share sensitive information over phone, email, or messaging apps.

By staying informed and cautious, you can safeguard your finances and avoid falling victim to fraud.

Always remember: the Income Tax Department will never rush you or ask for personal details through calls or messages. Any such communication should be treated with suspicion.

Disclaimer:
Articles published on the website are merely indicative and suggestive in nature and do not amount to solicitation. The contents do not guarantee the desired returns and/or results. Reader is advised to exercise discretion and consult independent advisors for achieving desired result.

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