Budget 2025: ITR portal glitches, Income tax notice management; other issues plague e-filing ITR portal; Experts urge FM to look into this

Budget 2025: ITR portal glitches, Income tax notice management; other issues plague e-filing ITR portal; Experts urge FM to look into this

The new Income Tax Return (ITR) filing portal 2.0 which was launched on June 7, 2021, is a simpler and user friendly than ITR portal 1.0 but like any new technology, this 2.0 portal is also experiencing many glitches. Moreover, chartered accountants say that there are certain problems in logical reasoning of the ITR portal. Sometimes a tax notice intimation is sent through email and SMS, but the said notice couldn’t be found on the ITR portal. Multiple such small issues collectively form a bigger grievance against the ITR portal.

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What are the issues with the ITR portal 2.0 which FM needs to fix in Budget 2025

We spoke with several chartered accountants who file thousands of ITRs of their clients and here’s what issues they highlighted:

Simplification of Income tax portal’s logic and improvement in notice management feature

Mihir Tanna, associate director, S.K Patodia LLP says the portal’s design is good and the user interface is also better than the old portal but the logic driving the actions on the ITR portal is not good. At some point the logic fails to be reasonable also. One such aspect Tanna highlights is notice management.

“When a notice under section 143(1)(a) is sent through email, only the intimation is shown. The actual reason for the proposed adjustment is buried deep within the ITR portal. We have even seen cases when one clicks on the "notice" tab; it can be seen that even the actual notice is missing but its intimation has come. In proceedings under other sections, we have also seen that despite the time limit to reply to a notice elapsing, the notice is stuck in the ‘For your action’ tab. Instead, it should have been automatically moved to the ‘For your information’ tab. In other cases, we saw our clients getting intimations to apply for Vivad Se Vishwas scheme, but the said dispute was already settled and was supposed to be closed. It may have been due to the concerned authority not clicking on the closed button after the proceeding is concluded.”

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143(1)(a)Source: S.K Patodia LLP

Tanna highlights that in the image when where the intimation of the notice can be seen there is no attachment of the actual notice. "We need to click on "submit" to get reason for proposed adjustment," he says.

Neeraj Agarwala, Partner, Nangia & Co LLP cites another example-compliance portal which limits the length of responses to notices or queries. “This obstructs clear communication and could be frustrating for the taxpayers.”

Agarwala suggests: “The government should thoroughly test systems before launch and implement a robust feedback mechanism. Prompt action should be taken to correct validated issues. Changes in tax law must be swiftly and accurately reflected in the ITR portal to prevent discrepancies and enhance user experience. These improvements are crucial for ensuring that the portals meet the needs of taxpayers and facilitate compliance without unnecessary complications.”

Difficulty in accessing AIS

Chartered Accountant Abhishek Soni, co-founder, Tax2Win raised the following issues with accessing AIS:

Many taxpayers were not able to access their Form 26AS/AIS.
The AIS/TIS currently provides limited options to respond, which might not be adequate for the taxpayers to describe their situation.

Agarwala has also raised similar concerns. He says, “A notable issue with the AIS involves joint property ownership: registration of joint ownership triggers transaction entry in the AIS for both owners’, potentially leading to unwarranted tax notices for a co-owner who did not financially contribute to the property.”

Soni has the following suggestions: “The income tax department should promptly look into the matter and address the issues as it is making it difficult for taxpayers to file their ITR. The income tax department can add a new response option, ‘Others’ in AIS/TIS, along with the option to attach supporting documents. This will allow taxpayers to specify their situation and provide detailed comments and explanations. Furthermore, the Income tax department can also work on the page loading speed to ensure a seamless e-filing experience for taxpayers.”

Soni highlights some other issues with the ITR portal.

Delayed response update in TIS: The responses are not getting updated promptly in TIS, and it is taking too much time.
Error messages during ITR filing: As per taxpayers, the portal shows error messages while filing ITR making it difficult to submit their income tax returns.
Not receiving OTPs for authentication: Many taxpayers are not receiving OTPs for authentication, leading to failure in ITR submission.

This story originally appeared on: India Times - Author:Faqs of Insurances