The Income Tax (IT) department has reached out to approximately 3 million salaried taxpayers nationwide via text messages and emails, pinpointing disparities between their claimed refunds in revised tax returns and the TDS (Tax Deducted at Source).
An official mentioned, “Given that December 31, 2023, marked the deadline for revised returns, we’ve issued alerts probing into discrepancies within their filings for assessment years 2023-24.”
This surge in alerts marks a significant increase, partly credited to a specialized unit established in Mysuru in October 2022. This unit centralized the process of matching and cross-verifying documents, contributing to heightened monitoring efforts.
The department provided taxpayers with a chance to rectify any errors in their reported income, deductions, bank information, personal details, missing income, or discrepancies between their original return and Form 26AS/Annual Information Statement by filing revised returns.
In a post on X dated December 26, the department clarified that the alerts sent were aimed at assisting taxpayers and informing them about the information held by the department regarding transactions reported by entities throughout the year.
“It’s not a blanket notice to all taxpayers; rather, it’s guidance sent only in cases where there’s an apparent mismatch between the ITR disclosures and the information received from reporting entities,” stated the post.
The official further highlighted that if taxpayers overlook the alert, the department will issue notices to them on an individual basis.
Experts suggest that the typical discrepancy often arises from the variance between the investments declared to the employer and those disclosed by the employee in their tax return.
Frequently, employees face challenges in making timely investments due to financial constraints and may claim tax deductions during the filing process, resulting in potential tax refunds.
These discrepancies commonly stem from factors like house rent allowance, medical insurance, home loan repayments, and tax-saving investments under Section 80C, among others. Additionally, notable disparities might arise due to property sales during the year or significant transactions like fixed deposit renewals.
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Moreover, utilizing its authority as per Section 133C of the Income Tax Act, tax authorities also issue notices requesting information from companies to corroborate the data they possess regarding any employee.