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CBDT Implements Online Tool for Taxpayers to Rectify ITR Mismatches

Income Tax Department Launches Online Feature to Resolve ITR Mismatches: A Step towards Seamless Tax Filing

The Income Tax Department of India has taken a significant step in its efforts to streamline tax filing by introducing an online feature to resolve discrepancies between taxpayers' Income Tax Returns (ITRs) and third-party information. This initiative, introduced by the Central Board of Direct Taxes (CBDT), aims to provide taxpayers with a structured opportunity to address these mismatches promptly and accurately.

Overview of CBDT's Online Tool

The newly launched online functionality on the compliance portal of the e-filing website allows taxpayers to reconcile the identified mismatches conveniently. The CBDT detected certain mismatches between the information received from third parties regarding interest and dividend income and the ITRs filed by taxpayers. In numerous cases, taxpayers have failed to file their ITRs altogether, exacerbating the discrepancies.

The primary purpose of this online feature is to offer taxpayers an easy and accessible platform to provide their response and rectify the mismatches. By doing so, the Income Tax Department aims to enhance transparency, accuracy, and compliance in the tax filing process, benefiting both taxpayers and the government.

Accessing and Using the Online Tool

To access the online feature, registered users of the e-filing website can directly navigate to the compliance portal by logging into their accounts. Under the 'e-Verification' tab, taxpayers can view the details of the identified mismatches and reconcile them effectively.

For taxpayers who are not yet registered on the e-filing website, the process is equally straightforward. By clicking the "Register" button on the website, they can provide the necessary details to complete the registration process. Once registered, users can log in and navigate to the compliance portal, where they can view and reconcile the identified mismatches.

Notably, the on-screen functionality within the compliance portal is self-contained, eliminating the need for additional documentation. Taxpayers can conveniently reconcile the mismatches on the portal itself by providing their responses. This user-friendly approach not only simplifies the process but also saves taxpayers valuable time and effort.

Proactive Communication and Provisions

To ensure that taxpayers are aware of the identified mismatches, the Income Tax Department is proactively reaching out to them through SMS and email notifications. These notifications are based on the contact details available with the department and serve as a communication rather than a notice.

A special provision has been made for taxpayers who have already disclosed their interest income under the line item 'Others' in Schedule OS of their ITRs. They do not need to respond to the mismatch related to interest income, as the system will automatically resolve it. The portal will reflect this resolution as 'Completed,' reducing any unnecessary burden on taxpayers.

In cases where taxpayers are unable to explain the identified mismatches, they have the option to furnish an updated Income Tax Return if they are eligible. This proactive step allows taxpayers to rectify any underreporting of income effectively. By addressing these mismatches promptly, taxpayers can avoid potential consequences and maintain transparency in their tax affairs.

Addressing Mismatches and Taxpayer Response

The process of addressing the identified mismatches is crucial to resolving the discrepancies and ensuring accurate tax filing. The on-screen functionality provided by the CBDT allows taxpayers to furnish their responses directly on the portal, eliminating the need for physical documents.

It is important for taxpayers to understand the significance of addressing these mismatches. Failure to reconcile the identified discrepancies may lead to further proceedings, such as assessments or reassessments, which could result in tax demands and penalties. By promptly responding to the communication and rectifying the discrepancies, taxpayers can avoid such unwanted consequences.

In conclusion, the Income Tax Department's introduction of the online feature to resolve ITR mismatches is a commendable step towards improving the tax filing process. This user-friendly and proactive approach benefits taxpayers by providing a structured opportunity to address discrepancies promptly and accurately. By leveraging this online tool, taxpayers can ensure transparency, compliance, and seamless tax filing.

author

The Tax Heaven

Mr.Vishwas Agarwal✍📊, a seasoned Chartered Accountant 📈💼 and the co-founder & CEO of THE TAX HEAVEN, brings 10 years of expertise in financial management and taxation. Specializing in ITR filing 📑🗃, GST returns 📈💼, and income tax advisory. He offers astute financial guidance and compliance solutions to individuals and businesses alike. Their passion for simplifying complex financial concepts into actionable insights empowers readers with valuable knowledge for informed decision-making. Through insightful blog content, he aims to demystify financial complexities, offering practical advice and tips to navigate the intricate world of finance and taxation.

Frequently Asked Questions

​​It is a tax levied by the Government of India on the income of every person. The provisions governing the Income-tax are covered in the Income-tax Act, 1961.​

Income-tax is levied on the annual income of a person. The year under the Income-tax Law is the period starting from 1st April and ending on 31st March of next calendar year. The Income-tax Law classifies the year as (1) Previous year, and (2) Assessment year.

The year in which income is earned is called as previous year and the year in which the income is charged to tax is called as assessment year.

e.g., Income earned during the period of 1st April, 2021 to 31st March, 2022 is treated as income of the previous year 2021-22. Income of the previous year 2021-22 will be charged to tax in the next year, i.e., in the assessment year 2022-23.​

Income-tax is to be paid by every person. The term 'person' as defined under the Income-tax Act under section 2(3) covers in its ambit natural as well as artificial persons.

For the purpose of charging Income-tax, the term 'person' includes Individual, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any artificial juridical person not covered under any of the above.

Thus, from the definition of the term 'person' it can be observed that, apart from a natural person, i.e., an individual, any sort of artificial entity will also be liable to pay Income-tax.​

Taxes are collected by the Government through three means: a) voluntary payment by taxpayers into various designated Banks. For example, Advance Tax and Self Assessment Tax paid by the taxpayers, b) Taxes deducted at source [TDS] from the income of the receiver, and c) Taxes collected at source [TCS]. It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly.

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