Electronic income

What does the tax assessment entail for large value transactions?

“The Income Tax (IT) Department has identified certain high value information which does not appear to be consistent with the Income Tax Return (ITR) filed for Assessment Year (AY) 2021-22 (relating to to fiscal year 2020-21).”

Did you also receive the same text message? But what if you don’t have any high-value transactions to report? In this case, you have nothing to fear because these messages are part of the IT department’s e-campaign.

“The objective of the electronic campaign is to inform the taxpayer of the transactions reported against his PAN by agencies such as banks, brokers, etc. An email or SMS is triggered when the system identifies discrepancies between the information available from the tax department and the information filed. by the taxpayer on their tax return,” said Neeraj Agarwala, Partner, Nangia Andersen.

The idea is to promote voluntary compliance to avoid the notice and review process for taxpayers.

“This (e-campaign) was made to verify information related to taxpayers’ financial transactions such as TDS (tax withheld at source), TCS (tax collected at source), statement of financial transactions (SFT), fund transfers overseas, exports, imports and trading in securities, derivatives, commodities and mutual funds,” said Sandeep Sehgal, tax partner, AKM Global, a tax and advisory firm .

The last AY was the first time the Annual Information Return (AIS) and pre-filled forms were introduced and it is highly likely that taxpayers did not reconcile them with their Form 26AS, TDS certificates or of their investment declarations, which led to the intimation by the IT Department in the event of a mismatch.

A discrepancy does not always mean that you have concealed information, but can also result from an error in the AIS, which should have been reported to IT as a return before March 31.

Such notification is not a Notice of Review and therefore there is no prescribed time limit for filing a response and no penalty will be imposed for non-filing.

“After receiving such notification, the taxpayer must provide comments, even in cases where a tax return has been properly filed. A preliminary response will allow the tax department to resolve the questions and avoid any subsequent notice and examination. Guidance on filing a response is available on the Compliance Portal under the ‘Resources’ tab,” Agarwala said.

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