Taxpayers facing inflated income problem on the compliance portal with these transactions asked to wait; CBDT There have been a huge disparity between transactions reported in AIS and as per the transaction conducted by taxpayers
Many taxpayers looking to figure out their advance tax payment liabilities have been facing problems of wrong or inflated incomes being shown in their Annual Information Statements (AIS). Taking cognisance of this issue, the Central Board of Direct Taxes (CBDT) has asked the taxpayers to wait for the updated data to be reflected on its 'AIS Compliance Portal' as certain financial data related to stock market and mutual fund transactions are being updated."Data pertaining to Information categories 'Sale of securities and units of mutual fund', 'Purchase of securities and units of mutual funds', 'Off market credit transactions' & 'Off market debit transactions' is being updated. Kindly wait for the updated data to be reflected on the portal," CBDT stated on the AIS Compliance Portal website.
Since the fourth instalment of advance tax for individuals is due on March 15, 2024 for FY 2023-24, many individuals might be worried if they would be penalised if there is a discrepancy. Experts suggest that there is no need to be anxious about paying advance tax on such inflated/wrong transaction value data on AIS.
"Given the clarification by the Income Tax Department, there is no reason to be anxious in case of a mismatch. If there is any discrepancy in the AIS Compliance Portal, taxpayers should pay their advance tax liability on the basis of evidence and data they possess. Hopefully the data inconsistencies will be cured before the income tax return (ITR) filing dates," says Anand Bathiya, vice president, Bombay Chartered Accountant Society (BCAS).
Also read: ITR portal shows inflated income to some taxpayers; Rs 450 showed as Rs 45000.
No penal interest would be charged for non-payment of advance tax on incorrect transactions
Experts say that there would not be any penal interest if taxpayers do not pay advance tax based on the incorrect reporting of income in AIS. "There is no provision nor proposition for levy of interest on shortfall in advance tax payment considering incorrect data as per AIS Compliance Portal. Taxpayers should pay advance tax as per their own data basis and calculations," says Bathiya.Experts suggest that taxpayers should be cautious and not overpay their advance tax liability. "Taxpayers should exercise caution and pay advance tax based on their calculations, disregarding any inflated figures presented on the AIS Compliance Portal. Relying on erroneous data could result in overpaying taxes, leading to unnecessary financial strain," says Sandeep Agrawal, co-founder, TeamLease Regtech, a legal compliance company.
What is the gravity of the glitch that is affecting data of taxpayers?
Some taxpayers' AIS showed huge amounts of transaction value regarding sale of shares and mutual funds and property. The difference between the actual value and the value shown on AIS was so huge that it sometimes ran into crores."In our office we recently saw a case where a client had Rs 10 lakh as capital gains, however his Compliance Portal/AIS was showing it as Rs 80 lakh, so that's a mismatch of Rs 70 lakh," says Bathiya.
"Taxpayers are strongly advised against relying solely on the AIS for the computation of advance tax, as it may not be entirely accurate due to these errors," says Neeraj Agarwala, partner, Nangia Andersen India, a tax and business advisory company.
According to Agrawal, "There could have been issues with the data analysis software, such as misinterpreting punctuation marks or a comma being mistaken for a decimal point. Furthermore, discrepancies may have arisen during data transmission or processing, leading to the inflated figures on the Compliance Portal."
Also read: Tax demand waiver: Income tax dept can waive off demand above Rs 1 lakh in these cases.
What should people do if the error is not solved on its own?
The Income Tax Department's post on X said that taxpayers should wait for the correct data to be updated. "Taxpayers are urged to calculate advance tax using their own data. While the information in AIS and Form 26AS can be utilized to reconcile income and TDS, it's crucial that the primary sources of information come from bank statements, demat statements, interest certificates, etc," says Agarwala from Nangia Andersen India.Experts also suggest that if taxpayers see that their AIS is still not corrected after some time, then feedback should be given to the Income Tax Department on the 'Compliance Portal'. "It's plausible that certain errors may persist despite efforts to rectify them. In such cases, taxpayers should utilise the feedback option provided on the AIS Compliance Portal to notify the tax department about the discrepancies observed," says Agrawal.
This story originally appeared on: India Times - Author:Faqs of Insurances
