“Proactive Step": Income Tax Department On Notices To Salaried On Mismatch

The Income Tax Department (ITD) issued a statement on Monday addressing concerns regarding recent communications sent to taxpayers regarding discrepancies in transaction amounts reported in their Income Tax Returns (ITRs).

The department, according to the statement, identified mismatches between information received from third parties regarding interest and dividend income and the ITRs filed by taxpayers. To reconcile these discrepancies, an on-screen functionality has been made available on the Compliance portal of the e-filing website.

Taxpayers have been notified about the mismatches through SMS and emails, with details displayed on the Compliance portal for the Financial Years 2021-22 and 2022-23. Those registered on the e-filing website can directly access the Compliance portal, while others must register first, the statement said.

The functionality allows taxpayers to reconcile mismatches directly on the portal without the need for additional documents. This proactive step, the Department said, aims to provide taxpayers with an opportunity to respond to the communication in a structured manner.

The department clarified that the communication is not a notice and taxpayers who have disclosed interest income under the appropriate line item in their ITRs need not respond to the mismatch to interest income.

Taxpayers unable to explain the mismatches may consider furnishing an Updated Income Tax Return if eligible to rectify any under-reporting of income, the statement said.