Income Tax Alert: Due to these reasons also the notice of Income Tax Department may come, know the rules

Did you file Income Tax Return (ITR) before the launch of Annual Information Statement (AIS)? Chances are that if you had overlooked some of the essential income received during the financial year, you may get a notice on your tax return.

Till now one had to mention the Annual Tax Statement or Form 26AS before filing the return. The Annual Information Statement was launched on November 1, 2021. This statement provides more information than 26AS. Only high value transactions and TDS are mentioned in Form 26AS whereas AIS contains all the details of savings bank interest, dividend, capital gains and share transactions.

Due to data mismatch between Form 26AS (NSDL) and pre-field Income Tax Form (Income Tax Department), many taxpayers got less refunds this year.

Kirti Misal, 38, forgot to mention the interest on a savings bank account from an old account that she hardly uses. He said, “I did not have a passbook or online access to that account. In my rush to file the return, I didn’t mention the savings interest.”

Since Kirti had filed her return in October 2021, she did not have access to AIS and has appointed a chartered accountant to respond to the notice.

Karan Batra, Founder, Chartered Club says, “The recently launched AIS is a comprehensive document and contains information like savings bank interest, dividend. The existing Form 26AS contained only FD interest and did not contain details of dividends. Therefore, those who did not have AIS information earlier and filed returns on the basis of Form 26AS only, are getting notices.”

The difference between the actual taxable amount and the reported transaction amount has led to several notices. Raju Shah, a chartered accountant based in Ahmedabad, says, “There are several adjustment notices that we have received for our clients. Therefore, the actual cost has been considered in the AIS in respect of capital gains. But there is an indexed cost to be considered under capital gains. Income tax notice u/s 143(1) has been received on account of difference in net and gross taxable income.

If you have received any such notice through email or post, please check the timeline to respond to the notice and avoid delay. Assess whether the mistake is genuine or consider a separate calculation.

If the tax demand is valid, then go ahead and follow the due process. If you need to file for rectification or report any mismatch, the online option is available after logging into the new income tax portal.