Income Tax Department Seeks Explanations for High-Value Transactions as Updated ITR Deadline Approaches The Income Tax Department is approaching many individuals to explain significant or high-value transactions visible in their Annual Information Statement (AIS) as the updated ITR deadline approaches for FY 2020-21.
Taxpayers are being contacted through email communication regarding certain transactions highlighted in the AIS, prompting them to visit the AIS/Compliance Portal and navigate to the “e-Campaign” section for further details.
Who is eligible to receive such communication from the tax department? The Income Tax Department seeks feedback from taxpayers regarding information obtained from various sources. Taxpayers may be required to provide a response or clarification through the e-Campaign tab, which could pertain to non-filing of returns or specific significant/high-value transactions.
The information visible in the e-Campaign tab of the AIS/Compliance Portal serves as a notification that the tax department has identified discrepancies between the disclosed income in the taxpayer’s ITR and the information available to them.
Eligible taxpayers desiring to rectify errors or omissions in their previously filed ITR for FY 2020-21 (AY 2021-22) have until the 31st of March, 2024 to file an updated return.
Mihir Tanna, associate director-direct tax at S.K Patodia LLP, highlights that as the deadline for ITR-U filing approaches, the tax department is sending emails related to FY 2020-21 to certain taxpayers. These communications indicate that the taxpayer’s case has been selected for e-Verification under the e-Verification scheme 2021, visible under the “e-Campaign” tab on the Compliance Portal.
How can taxpayers confirm receipt of e-Campaign communication? By logging into the ITR e-filing portal, navigating to the pending action tab, and accessing the “Compliance Portal,” individuals can review the e-Campaign tab and view the listed transactions flagged by the tax department. Clicking on a transaction provides further details on the specific flagged transaction.
The income tax department sends these communications to enhance compliance and verify financial transactions, explains that these communications play a vital role in validating financial transactions based on information sourced by the tax department from various channels, including TCS return, TDS return, specified financial transactions (SFT) return, and other relevant sources. Additionally, the tax department analyzes data related to GST, import/export activities, and transactions involving securities, derivatives, commodities, and mutual funds sourced from various third-party entities.