The Income Tax Department recently sent out a communication about an Information Mismatch Campaign for the financial years 2022-23 and 2021-22. Many assesses received this communication regarding a mismatch in Interest Income. The discrepancy arose from disclosing interest on fixed deposits and interest income from loans under different line items in the ITR under Income from other sources. The response tab does not provide an option to explain that the difference in interest shown as a mismatch is already disclosed under a different line item. If the AI system of the Income Tax Department is not improved and directed properly, it may lead to a lot of litigation in the future despite the proper discharge of tax liability.
Income Tax as usual Mass communication will be an headache for many :
Latest Communication from Income Tax Department: The email has been sent by Income tax department to many assessee on 24/02/2024 as communication regarding Information mismatch campaign for FY 2022-23 and FY 2021-22.
On opening the same through compliance portal, it is observed that the department has issued notice for mismatch of Interest Income. on further scrutiny it is found that mismatch has been occurred in the department system due to disclosure of Interest on Fixed deposit and Interest Income from loan under different line item in ITR under Income from other sources (which is general practice of disclosing by many one).
Moreover In response tab there are no option to mention that the difference of interest shown as mismatch/under reported is already disclosed under different line item as any other interest income.
If AI system of Income tax department is not further improved/directed properly, a lot of litigation will arise and pile up in near future resulting to harassment to the asseee even after proper discharge of their tax liability.