Income Tax Department Flags Mismatches in ITRs, Seeks Taxpayers Attention

The Income Tax department in India has detected discrepancies between the information received from third parties on interest and dividend income and the Income Tax Returns (ITRs) filed by taxpayers. In response, the Central Board of Direct Taxes (CBDT) has introduced an on-screen functionality on the e-filing website's compliance portal to enable taxpayers to address these mismatches.

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Discrepancies in Dividend and Interest Income

The Income Tax Department has identified instances where taxpayers have not filed their ITRs or have provided incorrect information regarding dividend and interest income. These mismatches pertain to the assessment years 2021-22 and 2022-23 and are now visible on the e-filing compliance portal.

Online Functionality for Taxpayers' Response

To rectify the mismatches, the CBDT has introduced an on-screen functionality on the e-filing website's compliance portal (https://eportal.incometax.gov.in). Taxpayers can access this feature to provide their response and reconcile the discrepancies. No physical documents are required to be submitted.

Communication with Taxpayers

The Income Tax Department is actively informing taxpayers about the mismatches through SMS and emails based on the contact details available with the department. Taxpayers who are unable to explain the discrepancies may consider filing an Updated Income Tax Return, if eligible, to address any under-reporting of income.

Details of Mismatches

Taxpayers can access the details of the identified mismatches under the e-verification tab on the e-filing portal. The on-screen functionality is self-contained, allowing taxpayers to resolve the mismatches directly on the portal without the need for additional documentation.

Proactive Approach by the Income Tax Department

The CBDT emphasizes that this initiative is a proactive step taken by the department to reach out to taxpayers and provide them with an opportunity to respond to the communication in a structured manner. This measure aims to enhance transparency and accuracy in tax filing.

Handling Disclosed Interest Income

In cases where taxpayers have already disclosed interest income in their ITRs under the line item "others" in Schedule OS, they are not required to respond to the mismatch pertaining to interest income. The mismatch will be automatically resolved and reflected as completed on the portal.

The Income Tax Department's identification of mismatches in ITRs and the introduction of an online resolution mechanism demonstrate the department's commitment to ensuring accurate tax filing and compliance. Taxpayers are encouraged to promptly address any discrepancies to avoid potential consequences and maintain transparency in their tax affairs.