E-Paper
Received message from Income Tax department? What taxpayers should know about income discrepancies
The income tax department said that the communication to taxpayers serve as advisories aimed at raising awareness about discrepancies in reported transactions.
The income tax department (ITD) on Thursday issued a clarification that the recent communication that was sent to taxpayers regarding their transactions was simply an advisory and that it was sent only in some selective cases.
The announcement was aimed at making taxpayers aware of the information and did not command enforcement.
What does the advisory say?
In the department's recent post on X, it wrote that such communication is aimed to facilitate the taxpayers & make them aware. “Taxpayers may please note that such communication is to facilitate the taxpayers & make them aware of the information available with the ITD regarding the transactions reported by the Reporting Entities during the year,” the post read.
The ITD added that the advisory was sent only in specific cases where there it had observed discrepancies. It was aimed at cases where there was a significant gap between disclosures in the income tax return and the information that it received from the reporting entities.
The communication was initiated to provide an opportunity to these taxpayers for voluntary correction, which can be done by reviewing their Annual Information Statement (AIS) and providing their feedback on the online compliance portal of the ITD. They can also revise their returns that are already filed or file belated returns if not done already.
According to income tax department, the last date for revising or filing belated return for assessment year (AY) 2025-26 is December 31 2025. The ITD urged taxpayers to respond promptly via the online compliance portal if discrepancies exist on their income tax returns.
Earlier this month, the ITD had initiated NUDGE, which stands for non-intrusive usage of data to guide and enable. The initiative is aimed towards helping taxpayers correctly report foreign assets/income.
Under the income tax act of 1961, and the black money act of 205, accurate disclosure of foreign assets and income in mandatory, and failing to do so might result in strict penalties.
