Do you know that your Income Tax Return (ITR) can be picked for ‘Scrutiny’ if the Income Tax Department detects a mismatch or discrepancy in your income, investments and expenses?
The IT department receives third party data from Banks, Sub-Registrar offices, Service Tax Department, Other financial institutions, your employer etc., This data can be related to your TDS, income and investments.
A mismatch can happen if this data do not match with the Income Tax Return that you have filed. Your AO (Assessing Officer) or IT dept system can randomly pick your case for scrutiny. In this scenario, you need to physically appear before the IT authorities and resolve the issue.
For example; Mr x sells a property worth Rs 35 Lakh and reports this high value transaction erroneously in his ITR as Rs 25 Lakhs . The sub-registrar office reports this as Rs 35 Lakh transaction to the IT department through AIR (Annual Information Report). This leads to a ‘mismatch issue’.
(What is AIR ? – Annual Information Return (AIR) of ‘high value financial transactions’ is required to be furnished under section 285BA of the Income-tax Act, 1961 by ‘specified persons’ in respect of ‘specified transactions’ registered or recorded by them during the financial year.)
To avoid the need for the taxpayer to physically appear before tax authorities and to reduce the ‘compliance cost’ (especially for small tax payers), the Finance Minister Shri Arun Jaitley recently launched an “e-Sahyog” pilot project.
Main Objective of E-Sahyog
The objective of “e-Sahyog” is to provide an online mechanism to resolve mismatches in Income-tax returns of those assesses whose returns have been selected for scrutiny, without visiting the Income Tax Office.
Under this initiative the Department will provide an end to end e-service using SMS, e-mails to inform the tax assesses of the mismatch.
You simply need to visit the e-filing portal and log in with your user-ID and password to view mismatch related information and submit online response on the issue.
The response(s) submitted online by you will be processed and if the response and other information are found satisfactory as per automated closure rules, the issue will be treated as closed. You can also check the updated status by logging in to the e-filing portal.
Types of Mismatch issues covered by e-sahyog project
You can submit online response for various types of mismatches. These are mainly related to immovable property transactions, Form 26AS mismatches and issues related to ‘Service taxes’. Below is the list of possible issues for which you can submit online response;
- Transfer of property reported in AIR by third party but capital gains are not declared by you in your Return of Income. This mismatch can occur when your ITR (ITR 1 or ITR 4S) does not contain details of any ‘transfer of property’ while the IT dept receives the details about transfer of property from sub-registrar of the properties by way of AIR return.
- The value of property transferred as reported in AIR is higher than the value of property transferred as reported in your Return of Income.
- The Payment of compensation on acquisition of immovable property as shown in TDS return filed by acquirer is more than sale consideration reported in the Return of Income filed by you.
- The Payment of compensation on acquisition of immovable property is shown in TDS return filed by Government but capital gains are not declared in Return of Income.
- The amount paid/credited as per Form 26 AS (194C and/or 194J) but no income from business/profession declared in Return of Income.
- The amount paid/credited as per Form 26 AS (Section 194C and 194J) is more than the gross turnover or gross receipts shown in Return of Income.
- The amount paid/credited reported in Form 26 AS (Section 194I) is significantly more as compared to the income from your house property as shown in Return of Income.
- The amount paid/credited in Form 26 AS (Section 194I) is significantly more as compared to the rental value as shown in Return of Income.
- The amount paid/credited as interest and winnings from lottery, crossword puzzle, races etc. in Form 26 AS is more than the Income from other sources shown in Return of Income.
- The amount paid/credited as interest in Form 26 AS is more than the interest income shown in Return of Income.
- The turnover from services reported in Service Tax Return but no income from business/profession declared in Return of Income. (or)
- Higher turnover reported in Service Tax Return as compared to gross turnover or gross receipts reported in Return of Income.
How to access e-Sahyog link? (or) How to view information related to mismatch?
If the IT department finds a mismatch(es) in your ITR, they will inform you about this through SMS / email / letter. You can view the details about the mismatch and can submit your ‘response’ by visiting e-filing portal.
- Login to e-filing portal.
- Click on ‘My Pending Action’ on the home page dashboard.
- Click on e-Sahyog link.
- Under e-Sahyog tab, you can view information and summary about the mismatch.
- Click on ‘Response’ to submit online response.
How to submit or respond to Income Tax Return Information Mismatch online through e-Sahyog link?
- Click on ‘Response’ to open ‘Return Mismatch Response’ window. The mismatch related information (relevant value in the ITR and third party information) will be displayed in “Return Mismatch Response”. Under ‘mismatch related information’ (as highlighted in the below image), the first row provides information about the data value pertaining to your ITR. Whereas, the second row has third party’s information.
- For example : As indicated in the below image, tax assessee has provided information about Rs 20 Lakh property transaction in his ITR. But, sub-registrar office has mentioned the property value as Rs 30 Lakh in their AIR which is submitted to the IT department. This is a classic example for a mismatch.
- You (tax assessee) will be given two options under Part-A of Preliminary Response section. Click on Option-1, if you do not have knowledge about the mismatch (or) Click on Option-2 if you have knowledge and information about the mismatch.
- If option-1 is your selection, click on ‘Next’ and submit your response.
- If option-2 is your selection, you have to submit detailed response under ‘Part-B‘.
- You have to provide all the required information related to the mismatch. You can select the mismatch response as;
- The value provided by the third party is wrong (or)
- The mismatch is on account of information relating to different PAN/AY (Assessment Year) (or)
- The information / transaction was incorrectly entered in original ITR and revised ITR has already been filed (or)
- Other reasons.
- After providing detailed summary, click on ‘Next’ and submit online response. You can take a printout of the response.
- In case if you have multiple mismatch issues, the response already submitted will appear in blue colour and the remaining ones will appear in red colour.
- The response(s) submitted by you will be processed and if the response and other information are found satisfactory as per automated closure rules, the issue will be treated as closed. You can also check the updated status by logging in to the e-filing portal.
I believe that this initiative of the IT Department is expected to significantly reduce the burden of compliance on small taxpayers and enhance the taxpayers’ satisfaction.
Have you used e-Sahyog online facility to resolve any mismatch issue? Do you think that e-Sahyog facility is useful for small tax payers? Kindly share your views.
(Image courtesy of Mister GC at FreeDigitalPhotos.net) (Reference : incometaxindiaefiling.gov.in)