Spammed with mismatched income SMS? Resolve discrepancies on I-T portal

Income Tax Return:  Received a notice about income discrepancies? Experts recommend promptly addressing it via the I-T portal. Many taxpayers recently received SMS and email notifications from the Income Tax (I-T) department informing them about discrepancies in their interest and dividend incomes for the financial years 2021-22 and 2022-23.

These notifications indicate disparities between what taxpayers have reported in their returns and the information received from banks and other entities. The I-T department clarified that these notifications, issued under the e-Verification Scheme 2021, do not constitute tax notices but rather provide taxpayers with an opportunity to rectify any discrepancies through the I-T portal.

Necessary taxpayer action

Experts advise taxpayers to respond promptly to these notifications by accessing the I-T portal using their PAN and password.

"Upon logging in, taxpayers should navigate to the 'Pending actions' tab, proceed to the 'Compliance Portal', and then click on the 'e-Verification' tab to view and respond to the notifications. For individuals who are not yet registered on the portal, registration is necessary before addressing the notifications," said Arpit Suri, CA and personal finance expert.

Suri also recommends that all taxpayers, including those who have not received notifications, check the portal for any income mismatches. These disparities may arise due to various reasons such as misclassification of income or differences in reporting methods between taxpayers and financial institutions.

Don't wait for automatic resolution

While some discrepancies may be automatically resolved, others may require further action from taxpayers. In cases where an explanation or correction is needed, taxpayers must act promptly to avoid potential future litigation. Failure to address these notifications could result in the reopening of tax assessments and scrutiny of the taxpayer's entire income for the relevant financial year.

To mitigate potential issues, taxpayers are advised to ensure accurate reporting of income and promptly respond to any notifications from the I-T department regarding income disparities. The I-T department has released an updated ‘User Guide for Submitting Response to Notices and Letters Received under the e-Verification Scheme, 2021’ to assist taxpayers with this process.

Future litigation risk

Tax experts caution against ignoring these notifications, as doing so could lead to litigation in the future. They stress that the tax department may reopen tax assessments where high-value transactions have not been reported or reported incorrectly, and corrective actions have not been taken by taxpayers.

Overall, taxpayers are urged to take these notifications seriously and take necessary steps to reconcile any income mismatches to avoid potential legal complications in the future.