The Central Board of Direct Taxes (CBDT), on February 26, 2024, flagged several discrepancies between Income Tax Returns (ITRs) and third-party information received regarding taxpayers’ interest and dividend incomes. The Income Tax Department urged taxpayers to address these disparities promptly using a new functionality added to the tax filing portal.
An on-screen functionality is now available on the compliance portal of the e-filing website at https://eportal.incometax.gov.in, where taxpayers can respond to the identified mismatches. “At present, the information mismatches relating to Financial Years 2021-22 and 2022-23 have been displayed on the compliance portal. The taxpayers are also being made aware of the mismatch through SMS and emails as per details available with the department,” it said in a press release.
According to the CBDT, many taxpayers have not filed their ITRs. The notification was made by the department as part of the e-Verification Scheme-2021. The CBDT said details of mismatches identified will be available under the “e-verification” tab on the portal. Taxpayers not registered on the e-filing website must register themselves on the e-filing website to view the mismatch. For registration, click the “Register” button on the e-filing website, and it will provide the relevant details therein. After successful registration, one can log out from the e-filing account page and navigate the compliance portal to view the mismatches.
If you can explain the mismatch, the Income Tax Department will, in the next 3-4 months, initiate a process of contacting the source or reporting entity which reported the information and will seek confirmation about the correctness of the data.
If you are opting to explain the mismatch, note that the on-screen functionality is self-contained and will allow taxpayers to reconcile the mismatch on the portal by furnishing your response. You are not required to provide any documents. Details of your transactions where disputes may have been raised can be seen in the AIS portal of your income tax account for FY2020-21 onwards.
But if the department was correct in pointing out the mismatch, and you are not able to explain the mismatch, the taxpayer should file an updated return. It can be done within two years from the end of the relevant Assessment Year. So, for the financial Year 2021-22, it is the last year to file updated returns. Updating your Return of Income under Section 139(8A) of the I.T. Act, 1961, if eligible, should be done by paying tax on the missed income and additional tax to avoid further proceedings in the form of assessment/reassessment, which could lead to tax demand and penalty. Currently, there is no penalty as such. However, you must pay an additional tax of 25 per cent in the first year and 50 per cent in the second year while updating your return.
If the taxpayer has disclosed the interest income in the ITR under the line item ‘others’ in the Schedule OS, he/she need not respond to the mismatch about the interest income. The mismatch will be resolved on its own and reflected in the portal as ‘completed’.
