Got tax dept SMS on high value transaction mismatch? Here is how to deal with it

Three of the chartered accountants Mint spoke to confirmed that their clients have received such SMSes from the tax department.

Tarun Kumar, a Delhi-based chartered accountant, said some of his clients have received this SMS. “The SMS has caused panic among taxpayers as the deadline to reply is very shorthand as 31st March is the last date to file a revised return. Taxpayers effectively had two days to reply or file revised returns. It will be difficult for people to do it without professional help.”

Most of these queries are related to the interest on fixed deposits (FD), saving accounts and debentures or bonds.

The SMS stated, “Attention xxxxxxxxxx (XXXXX5362X),The Income Tax Department has identified high value information which does not appear to be in line with the Income Tax Return filed for Assessment Year 2020-21 (relating to FY 2019-20). Please revise ITR / submit online response under e-Campaign tab on Compliance Portal (CP). Access CP by logging into the e-filing portal and clicking on ‘Compliance Portal’ link under ‘My Account’ or ‘Compliance’ tab – ITD.”

Banks and other financial institutions such as mutual funds, companies etc are required to send information related to the transactions exceeding a certain threshold to the tax department.

In case of savings bank account, interest of up to Rs10,000 from all bank accounts of a taxpayer is exempt from tax but taxpayers are required to disclose it. In case they haven’t they may get a notice from the department.

As banks were closed on Holi, people are facing difficulty getting data from banks. Also, there is no public dealing by banks on 31 March. This may lead to problems for taxpayers in replying in case there is a mismatch, and they need some information from their banks.

Prakash Hegde, a Bengaluru-based Chartered Accountant, said some of his clients have received this SMS. As per the Income Tax Department they have not disclosed their FD interest. “The Income Tax Act allows the taxpayers to disclose the interest from FD either in the year in which it is accrued or the year in which it will be received. My clients have chosen the second option therefore we will reply to the tax department’s query instead of filing a revised return.”

Some experts feel it will help taxpayers correct the mistake if they have done as today is the last date to file revised returns for the financial year 2019-20.

“It is a good thing that the Income Tax Department is alerting the taxpayers. By doing this they are giving the taxpayers a chance to rectify the error at this stage and avoid scrutiny assessment,” said Gautam Nayak, a Mumbai-based chartered accountant.

In case you have got this SMS, check your bank statement and other documents to see if there is any mismatch or not. In case there is no mismatch or partial mismatch you can reply on the compliance portal.