Many taxpayers are facing challenges with their advance tax payments due to inaccuracies in their Annual Information Statements (AIS). The Central Board of Direct Taxes (CBDT) has recognized this issue and advised taxpayers to await updated data on the ‘AIS Compliance Portal‘, especially concerning financial data related to stock market and mutual fund transactions.
The CBDT has stated on the AIS Compliance Portal website that data related to categories such as the sale and purchase of securities and units of mutual funds, as well as off-market credit and debit transactions, is being updated. With the fourth instalment of advance tax for individuals due on March 15, 2024 for FY 2023-24, individuals may be concerned about potential penalties arising from any discrepancies. However, experts reassure taxpayers that there is no need to worry about paying advance tax based on incorrect AIS transaction values.
It is emphasized that taxpayers should pay their advance tax liability based on their own evidence and data, irrespective of any discrepancies on the AIS Compliance Portal. There is hope that the data inconsistencies will be resolved before the income tax return (ITR) filing dates.
Furthermore, experts clarify that no penal interest will be charged for non-payment of advance tax due to incorrect AIS transactions. Taxpayers are advised to pay advance tax based on their own calculations, as there is no provision for levying interest on shortfalls in advance tax payment resulting from incorrect data on the AIS Compliance Portal. It’s important for taxpayers to exercise caution and not overpay their advance tax liability to avoid unnecessary financial strain.
The severity of the glitch affecting taxpayers’ data is evident in cases where AIS shows significantly inflated transaction values for the sale of shares, mutual funds, and property compared to the actual values. Such discrepancies can amount to a substantial sum, as observed in real-life cases. Taxpayers are strongly cautioned against relying solely on AIS for advance tax computation, given its potential inaccuracy due to these errors.
In the event that the error is not resolved automatically, the Income Tax Department advises taxpayers to calculate advance tax using their own data. Additionally, while AIS and Form 26AS can help reconcile income and TDS, primary sources of information such as bank statements, demat statements, and interest certificates should be the primary reference points. If discrepancies persist, taxpayers are encouraged to provide feedback to the Income Tax Department through the AIS Compliance Portal to notify them about the observed discrepancies.