The Central Board of Direct Taxes (CBDT), via its press release under the e-Verification Scheme-2021, implemented an "on-screen functionality" to reconcile the discrepancies identified between the information received from third parties and the information filed by the taxpayers in the return of income. The on-screen functionality is available on the compliance portal on the e-filling website.
The e-Verification Scheme-2021 was introduced by CBDT on 13 December 2021 and was notified vide notification no. 137/2021. The said scheme refers to a scheme implemented to facilitate online verification of documents and transactions, particularly for income tax-related matters. The primary objective of this scheme is to verify the accuracy or correctness of information for cases where there is a mismatch or discrepancy in the information available with the department vis a vis disclosed by the taxpayer in the income tax return.
The on-screen facility has been launched in order to provide the taxpayer with an online easy platform to resolve the mismatch in income by way of interest and dividend, which is reported by the third party and does not match with the income offered by the taxpayer for the FY 2021-22 and 2022-23. The reporting is done by third parties related to the interest and dividend income in the SFT and TDS Returns.
As per the press release, the Income tax department shall notify the discrepancies of the taxpayers through SMS on a registered mobile number or number linked with Aadhar and through email on the email-id registered on the income tax portal or the email-id available on the database of various registration authorities. The taxpayer can easily resolve the discrepancy by providing a response through the e-verification tab on the compliance portal without submitting any supporting documents. Unregistered taxpayers can submit their responses by registering themselves on the e-filing website. If a taxpayer has not filed a return or has not reported his income correctly, this is an opportunity to file an updated income tax return if eligible.
Our Comments
In the last couple of years, the CBDT has been systematically
working towards gathering income data from various sources to
ensure minimum/no tax leakages. This is one more step in that
direction.
The taxpayer is also allowed to disclose any unreported income by
filing an updated return. One should note that the mismatch
determined under the e-verification scheme is likely to be subject
to risk assessment for further proceedings, especially if the ROI
is not updated expeditiously.
This verification should lead to more tax collection on hitherto
unreported income, thereby incurring minimal administrative costs
for the tax department. Furthermore, henceforth, given the
verification introduced above, it is expected that taxpayers will
be prompt to report income correctly in their tax returns.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
