ITR 2024: Income Mismatch In ITR? Don't Worry Here How You Can Fix It
Filing income tax returns (ITRs) is crucial for every taxpayer, but sometimes, discrepancies arise between the information provided by third-party entities and what is reported in the ITR. This mismatch can lead to receiving an income tax notice if left unaddressed. However, there's no need to panic. Here's how you can fix it.
The Income Tax Department has introduced a new online functionality called the Compliance Portal, accessible via https://eportal.incometax.gov.in, to assist individuals in identifying and resolving mismatches in their ITRs. This initiative aims to streamline tax compliance and address any unreported or under-reported financial transactions promptly. The name of this web portal is 'Compliance Portal' and the scheme is being called 'E-Verification Scheme 2021'.
"In some cases of Income Tax Returns (ITRs) filed for A.Y. 2021-22 (F.Y. 2020-21), a ¡®mismatch¡¯ has been identified, between the information filed in the ITR vis-¨¤-vis information of specified financial transactions, as available with the Department. In cases where ITRs for A.Y. 2021-22 have not been filed and, the Department is in possession of information of specified high-value financial transactions, the same also needs to be examined," said the Income-tax department in a press release dated March 4, 2024.
The tax department advised taxpayers to file amended income tax returns (ITRs) for the 2021-22 assessment year by Sunday, March 31, 2024.
"In case the taxpayer has disclosed the interest income in the ITR under the line item 'Others' in the Schedule OS, she/he need not respond to the mismatch pertaining to the interest income. The said mismatch shall be resolved on its own and will be reflected in the portal as 'Completed'," it had earlier said.
The tax department is using emails to talk to taxpayers about the e-verification scheme 2021. They're asking taxpayers to check their Annual Information Statement (AIS) on the Income Tax Department's website. If they see any differences, they can file a revised tax return (ITR-U). This helps make tax processes clear and encourages people to follow the rules.
For the financial year 2020-21, taxpayers got a new option under Section 115 BAC of the Income Tax Act. This new option lets people choose a different tax system with simplified tax rates. It's for those who didn't use certain deductions or exclusions when calculating their taxes.
Understanding the Mismatch Error: Common Causes
Tax experts have identified several factors contributing to mismatch errors. For instance, some taxpayers inadvertently accept duplicate details in the Annual Information Statement (AIS), resulting in the system erroneously counting the same income twice. Additionally, the comparison of interest amounts reported by banks and other entities may lead to discrepancies in specified cases.
The E-Verification Scheme: A Solution to Enhance Tax Compliance
The E-Verification Scheme plays a pivotal role in enhancing tax compliance by providing taxpayers with insights into identified mismatches during ITR processing. This scheme empowers individuals to update their income accurately, explain financial transactions with evidence, and clarify any discrepancies before facing further assessment or reassessment.
Accessing the Compliance Portal: Step-by-Step Guide
To access the Compliance Portal, taxpayers can follow these simple steps:
- Visit https://eportal.incometax.gov.in or https://www.incometax.gov.in/iec/foportal/ and log in using your credentials.
- Navigate to the 'Pending Actions' tab and click on the 'Compliance Portal' button.
- Upon redirection to the portal (https://ais.insight.gov.in/complianceportal/everification), click on the 'Verification' tab to view all identified mismatches.
Addressing the Mismatch: What If You Can't Explain It?
In case individuals are unable to explain the mismatch, they can consider filing an Updated Income Tax Return (ITR-U) if eligible. This option allows taxpayers to rectify any underreporting of income and avoid potential income tax notices. The deadline for filing ITR-U is typically 24 months from the end of the respective assessment year.
It's essential to proactively address any income mismatches in your ITR to avoid potential tax complications. By utilizing the Compliance Portal and following the steps outlined above, taxpayers can ensure accurate reporting of their income and maintain compliance with tax regulations. Remember, timely action can save you from unnecessary hassles and penalties in the long run.
(Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as professional tax advice. Tax laws and regulations may vary depending on individual circumstances and jurisdiction. Readers are advised to consult with a qualified tax professional or financial advisor regarding their specific tax situation. We do not assume any responsibility or liability for any errors or omissions in the content of this article.)
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