The Income Tax Department has addressed concerns raised by taxpayers participating in the e-campaign for advance tax. The department said it had identified some inconsistencies in the data of the securities market (SFT-17) provided by one of the reporting entities.
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Consequently, the said entity has been directed to submit a revised statement based on updated information.
Based on feedback from taxpayers on the e-campaign for Advance Tax, the Department has identified certain inconsistencies in the data of the securities market (SFT-17) provided by one of the Reporting Entities. The reporting entity has been asked to submit a revised statement…
— Income Tax India (@IncomeTaxIndia) March 11, 2024
The need for this clarification arises from the errors in the financial transaction data, resulting in taxpayers receiving notices for advance tax payments significantly higher than anticipated for FY23-24.
Taxpayers, particularly those who have sold shares or property, reported highly inflated transaction values on the compliance portal.
According to Chirag Chauhan, a practising chartered accountant from Mumbai, instances have been observed where the value of assets, such as shares or property, was increased significantly.
For example, one share valued at ₹450 was erroneously shown as ₹45,000, and property sales of ₹1.2 crore were inflated to ₹12 crore.
Erroneous Notice to Pay Advance Tax sent by Income Tax to many who have sold shares/property.
The value of assets sold has been increased by two zeros, for example, one share of Rs 450 of ITC is shown as 45000/- and property sold of 1.2 crores is shown as 12 crores, resulting… pic.twitter.com/ppF9QyO919— CA Chirag Chauhan (@CAChirag) March 11, 2024
Tax department's action
Income Tax Department will now have to initiate updates to the data on the Annual Information Statement (AIS).
AIS essentially provides a comprehensive overview of all monetary transactions done by a taxpayer within a financial year.
This development comes in the wake of the Income Tax Department's e-campaign, launched on March 10.
The campaign aimed to notify taxpayers whose tax payments in FY23-24 did not align with the financial transactions reported in AIS.
The department, in a press release, stated that the analysis for this campaign is based on 'Significant Transactions' from the AIS module of the e-filing portal.
Experts now recommend taxpayers utilise the feedback option to inform the tax department about the errors in notices.
(Edited by : Amrita)
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