Income Tax Department Clarifies Mismatch Issues for Taxpayers in 2024

Understanding the Income Tax Department's Communication on Mismatches

The Income Tax Department (ITD) of India has recently addressed taxpayer concerns regarding discrepancies between transaction amounts reported in Income Tax Returns (ITRs) and the data held by the department. This initiative is part of the e-Verification Scheme-2021, aimed at enhancing the verification process for income declarations and ensuring the integrity of tax filings.

Recent Announcement from the ITD

On February 26, 2024, the Income Tax Department acknowledged growing apprehensions about a communication directed at taxpayers concerning mismatch issues associated with transaction amounts in filed ITRs. In response, the Department issued a press release clarifying the situation:

• The query regarding mismatches is a structured inquiry, specifically focusing on interest income reported within ITRs.
• Taxpayers who have reported interest income under the ‘Others’ line item in the Schedule OS are not required to address mismatches related to that income.
• Such mismatches will be resolved automatically and marked as ‘Completed’ on the taxpayer's portal.
• Taxpayers can check the status of these mismatches via the Compliance Portal.

The communication aims to facilitate taxpayer interaction by allowing them to provide feedback directly online through the ITD’s Compliance Portal. If necessary, they may also file an Updated Return.

Key Points from the Press Release

Ministry of Finance
Implementation of the e-Verification Scheme-2021

The Income Tax Department has pinpointed discrepancies between third-party information regarding interest and dividend income and the ITRs submitted by taxpayers. It is noted that some taxpayers have yet to file their ITRs.

• An on-screen response functionality has been introduced on the Compliance portal of the e-filing website https://eportal.incometax.gov.in to help reconcile these mismatches.
• Taxpayers are notified of discrepancies through SMS and email communications.
• Currently, mismatches for the Financial Years 2021-22 and 2022-23 can be viewed on the Compliance portal.

Accessing the Compliance Portal

Registered users of the e-filing website can access the Compliance portal directly by logging into their accounts; mismatch details will be available under the ‘e-Verification’ tab.

The on-screen functionality allows taxpayers to address mismatches directly on the portal without the need to submit any documents. This proactive measure by the ITD encourages structured responses to communications and clarifies that this communication is not a notice.

Guidance for Taxpayers

Taxpayers who have disclosed their interest income correctly under the ‘Others’ category in Schedule OS need not respond to any mismatch notification; it will be resolved automatically.