Taxpayers receive notices: Data mismatch between AIS and Form 26AS the reason

Did you file an early income-tax return, before the Annual Information Statement (AIS) was launched? Chances are your tax return may have attracted a demand notice if you had ignored some essential income received during the financial year.

So far, one had to refer to the annual tax statement or the Form 26AS before filing returns. The AIS was launched only on November 1, 2021. While only high-value transactions and tax deductions at source are mentioned in Form 26 AS, the AIS contains all details of savings bank interest, dividends, capital gains and share transactions.

Many taxpayers got lower refunds this year due to data mismatch between Form26AS (from NSDL) and the pre-filled income tax forms (maintained by the income-tax department).

Kirti Misal, 38, had forgotten to mention the savings bank account interest from an old account that she hardly uses. “I didn’t have the passbook or online access for that account. In the rush to file the returns, I didn’t mention the savings interest,” she says.

Since Kirti filed her return in October 2021, she didn’t have access to the AIS and has engaged a chartered accountant to respond to the notice.

“The recently-launched AIS is a comprehensive document and contains a vast amount of information such as savings bank interest, dividends. The existing Form 26 AS used to feature only the FD interest and wouldn’t capture the details of dividends. So, those who didn’t have the AIS information available before and filed the returns only based on Form 26 AS have been receiving notices,” says Karan Batra, founder, Chartered Club.

The differential in actual taxable amount and the reported transaction amount has led to many notices.

Ahmedabad-based Chartered accountant, Raju Shah, says, “There are many adjustment-linked notices that we have received for our clients. So, with regards to capital gains, the actual cost has been considered in AIS. But under capital gains, an indexed cost is to be considered. Due to the difference in the net and gross taxable income, an income tax notice has been received under Section 143 (1).”

Shah had to respond to the notice within 30 days, but the income tax portal wasn’t permitting uploads of response, so he resorted to the manual response method.

Similarly, there is a difference in share sale transactions too. “The value of actual taxable sale never matches as per the AIS as the gross amount is mentioned including brokerage and other costs. The notices are computerised, based on the AIS figures and hence even indexed costs aren’t considered,” says Paras Savla, partner at KPB & Associates.

“Double reporting (amount reflected under two PANs) is being done for specified financial transactions when it comes to joint holding in shares and mutual funds,” Savla adds.

What to do?

So, if you have received such a notice via email or post then check the timeline to respond to the notice and avoid delay. Assess whether the mistake is actual or a different calculation has been considered.

“For bank account interest, reporting of dividends, the tax assessee is responsible. With or without AIS, it has to be reported,” says Shah.

If the tax demand is valid, then go ahead and follow the due procedure. In case you need to file for rectification or report any mismatch, then the online option is available once you log into the new income tax portal.

How to avoid notices

If you are yet to file your tax return, then do check both the Form 26 AS and the AIS before filing the tax return. Do not forget to take into account all the bank accounts for the purpose of savings bank account interest and dividends. Remember, some income would not be taxable, but yet has to be declared in the income tax return.

This is critical in the current year, as the assessees have not much time to revise the return. This is because due date for filing original ITR is 31st December 2021 (extended) and for revised ITR, it is 31st March 2021.

    9 thoughts on “Taxpayers receive notices: Data mismatch between AIS and Form 26AS the reason”

    1. IN MY CASE TDS OF 45000+ HAS BEEN CORRECTLY MENTIONED IN FORM 26 AS WHEREAS THE SAME HAS NOT BEEN CAPTURED IN AIS? I SENT SEVERAL REMINDERS BUT NO ONE IS BOTHERED TO RESPOND. MY REFUND HAS NOT BEEN RECEIVED?

    2. Since the Finance Dept is aware there are many glitches in the system, it should instruct Income Tax not to take coercive action on the Assesees till such glitches are corrected.
      System is required, no doubt, but mass mis-matches, should be condoned and when the system is up and above, corrections in mismatches should be pointed out and the Assesees must be given sufficient time to match them.

    3. KUNAL TANDON, ADVOCATE

      SIR/MADAM, AS PER BELOW ARTICLE PUBLISHED BY YOU ON 16TH DEC 2021, YOU HAVE WRONGLY MENTIONED THE DUE DATE FOR REVISED ITR AY 2021-22 AS 31ST DEC 2021 INSTEAD OF 31ST MARCH 2022 AND CREATED CONFUSION AMONGST THOUSANDS OF TAX PAYERS

      PLEASE DONOT POST INCORRECT DUE DATES AND VERIFY THE DETAILS OF YOUR ARTICLE BEFORE PUBLISHING IT ONLINE

      ​​BEST REGARDS
      KUNAL TANDON, ADVOCATE
      MOB. 9818185030

    4. KUNAL TANDON, ADVOCATE

      SIR/MADAM, AS PER BELOW ARTICLE PUBLISHED BY YOU ON 16TH DEC 2021, YOU HAVE WRONGLY MENTIONED THE DUE DATE FOR REVISED ITR AY 2021-22 AS 31ST DEC 2021 INSTEAD OF 31ST MARCH 2022 AND CREATED CONFUSION AMONGST THOUSANDS OF TAX PAYERS
      PLEASE DONOT POST INCORRECT DUE DATES AND VERIFY THE DETAILS OF YOUR ARTICLE BEFORE PUBLISHING IT ONLINE
      ​​​BEST REGARDS
      KUNAL TANDON, ADVOCATE
      MOB. 9818185030

      1. Respected Sir,
        This was a typo error. Now we have corrected the article. Thank you for your comment.

    5. iT returns filed included TDS on dividend income and the amiunts matched With Form 26AS. However , such TDS has been disallowed andvnotice filed under sec 154. Therevis no provision in the new portal for rectification. I am asked to file revised return .
      To file revised return, saved copyvof original return is not made available.

      This is perfect example for making a tax payer to suffer .

    6. Last but not least, the assessees who hide things are to be dealt with by the it deptt. as such and to be marked for random detailed assessment. Whatever be the so-called glitches, it is just suppression of income by a major portion of such assessees. Let the citizens know their responsibilities to pay the taxes. I know of numerous cases who have been giving wrong incomes or have not filed returns for decades as such.

      1. i have verfied latest AIS and Form 26AS also. There is no change in the figures , and the income and tds remains as is when i reported in original return.
        Still, what rectification i can do to claim TDS on Dividend disallowed during assessment but very much recorded in Form 26AS.

        The general comments about hiding and suppresion of income is irrelevant to my predicament. I shared the problem so that others who may have such instances and how they are rectifying it. IT office says file rectification > mismatch of tDS credits correction. This option is not available in the new portal.

        kalyani

    7. Hardly 2% of the total number of assessees are TRUE to their conscience and do file their returns properly. People who file their returns themselves are not true. All returns to be filed thru CAs ONLY REPEAT ONLY. This is just like 2fa.

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