CBDT brings new update in income tax AIS; now you can check the status of correction request; Here's how it works
Many taxpayers have discovered inaccurate information in their Annual Information Statement (AIS) and have had to provide feedback about it. After you provided feedback, there was no way to know whether the reporting entities, such as banks, acted on this feedback. But now, the Central Board of Direct Taxes (CBDT) has updated the functionality of the AIS to include the status of the information confirmation process in real-time. "The CBDT has now rolled out a new functionality in AIS to display the status of information confirmation process. This will display whether the feedback of the taxpayer has been acted upon by the Source, by either, partially or fully accepting or rejecting the same," said CBDT in a press release dated May 13, 2024.How does the new functionality work in AIS?
The AIS is located through the compliance portal and available to all registered income taxpayers. The compliance portal cannot be directly accessed, and you will have to first log in to the e-filing ITR portal and then navigate to the compliance portal, which is housed under the 'Pending Actions' tab."The Annual Information Statement (AIS) is available to all registered Income Taxpayers through the compliance portal, accessible through the e-filing website (www.incometax.gov.in)," said CBDT in its press release.
Here's how the new AIS functionality works
As per CBDT's press release, in case of partial or full acceptance, the information is required to be corrected by filing a correction statement by the source.The following attributes shall be visible in the AIS for the status of feedback confirmation from the source:
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Whether feedback is shared for confirmation: This will let you know if the feedback has been shared with the reporting source for confirmation or not.Feedback Shared On: This will let the taxpayer know the date on which the feedback has been shared with the reporting source for confirmation.Source Responded On: This will tell you the date on which the reporting source responded to the feedback shared with it for confirmation.Source Response: This will tell you what the response is provided by the source based on the taxpayer's feedback (if any correction is required or not).
"This new functionality is expected to increase transparency by displaying such information in AIS to the taxpayer," said CBDT in the press release.
How can the new functionality in the AIS system help you?
If the AIS data is wrong, you must provide feedback for its correction. However, problems have occurred in the past when the reporting source did not act in time to make this correction, and as a result, the taxpayer received an income tax intimation notice due to a mismatch between the AIS and ITR data."It is observed by us that due to wrong information in AIS, many genuine taxpayers panicked on receipt of intimation from income tax department regarding mismatch of data in AIS and ITR filed. In the past we have faced issues with some of the clients, wherein transactions of sale and purchase of shares were shown in AIS but actually the same was not carried out by our client. Accordingly, we have provided feedback in the AIS tab, but we were not sure whether necessary action by the reporting entity was taken or not," says chartered accountant Mihir Tanna, associate director-direct tax, S.K Patodia LLP, a CA firm.
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This new functionality will provide you with clarity about whether you need to take any further action after feedback has already been given about incorrect information in AIS. "If the reporting source does not accept the feedback, then only necessary action is required to be taken by the taxpayer. This clarity and transparency have now been given by this new functionality," says Tanna.
Experts say that CBDT's press release is silent about the mode of communication to be used to inform the taxpayer about the feedback provided by the reporting source.
"The new feature now will inform the taxpayer after his/her feedback about incorrect data in the AIS, the date on which reporting source is informed and a confirmation will be sent. Likewise, the taxpayer will also be informed about the response and date of such response from the source. The press release is silent about the mode of such communication to the taxpayer. Most probably it can be an SMS to registered mobile number and an email to registered email ID.," says Divya Jokhakar, Partner, B.D.Jokhakar & Co, a CA firm. She is also an associate of Association of Chartered Certified Accountants (ACCA) at United Kingdom (UK).
Experts also say that the communication flow between the taxpayer and reporting source becomes easier. "The benefit of this is that communication will no longer be one way like previously, but it will give taxpayers a possible sigh of relief that the feedback is taken care of. He/she can also deal with the source like tax deductors / collectors / SFT filers etc," says Jokhakar.
What was happening in the old AIS feedback system?
AIS is populated based on the financial information received from multiple sources, which are called reporting entities. This information provides a picture of all the financial transactions undertaken by the taxpayer and gives a base upon which income tax return can be filed. However, as this information is based on reporting by third parties, there remains a chance that due to an error in reporting, the AIS database was fed with wrong information.To solve this problem, CBDT introduced a feedback system in AIS.
"In AIS, the taxpayer has been provided with a functionality to furnish feedback on every transaction displayed therein. This feedback helps the taxpayer to comment on the accuracy of the information provided by the source of such information. In case of wrong reporting, the same is taken up with the source for their confirmation, in an automated manner. It may be noted that information confirmation is currently made functional with regard to information furnished by Tax Deductors/Collectors and Reporting Entities," said CBDT in the press release.
With the current update, the feedback system has been made more responsive, and it empowers taxpayers to take corrective measures and check the status of a request for correction.
This story originally appeared on: India Times - Author:Faqs of Insurances
