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Mismatches of Income between Information Received from third parties and the Income Tax Return Filed (Specifically for Interest and Dividend)

Introduction: Recent communication regarding mismatches in interest and dividend income between third-party information and filed tax returns has prompted action from taxpayers. The e-filing portal has introduced a functionality to reconcile these mismatches, offering a proactive opportunity for structured responses. A press release issued by CBDT yesterday and same can be read at following link:  Advisory: Mismatch of transaction amount shown in Income Tax Return

In last couple of days lots of taxpayer received communication for mismatches between the information received from third parties on interest and dividend income and the Income Tax Return (ITR) filed by taxpayers.

The compliance portal of the e-filing website started an on-screen functionality to reconcile the mismatch. Presently the information mismatches relating to Financial Years 2021-22 and 2022-23 (Assessment Year 2022-23 and 2023-24) have been displayed on the Compliance portal.

In this regard department has already sent SMS and emails to those taxpayers where data mismatch happened. Kindly check your inbox of SMS and email.

Taxpayers already registered on portal can navigate to compliance portal directly after logging into their account.

Login to e-filing portal → Pending Action →  Compliance Portal → on compliance portal home page, navigate to “e-verification” tab to view the information mismatch and to submit response.

Taxpayers who are not registered on the e-filing website have to register themselves on the e-filing website to view the mismatch. After successful registration, the e-filing account can be logged into and the compliance portal can be navigated to view the mismatches.

While providing response to communication no document is required to be furnished. This is a pro-active step taken an opportunity to respond to the communication in a structured manner.

In case the taxpayer has disclosed the interest income in the ITR under the line item “others” in the Schedule OS, taxpayer 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”.

If the taxpayers who are unable to explain the mismatch may consider the option of furnishing an Updated Income Tax Return if eligible, to make good any under reporting income.

Conclusion: With the e-filing portal’s new functionality, taxpayers can efficiently address mismatches in interest and dividend income without the need for document submission. This proactive step allows for a structured response, ensuring compliance and resolving discrepancies promptly.

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April 2024