Mismatch in Form 26AS, ITR details? You won’t get demand notice from taxmen now

Mismatch in Form 26AS, ITR details? You won’t get demand notice from taxmen now

Good news for taxpayers. Now you won’t be issued a demand notice from the Income Tax Department automatically if the details given in your income tax return (ITR) do not match with your Form 26AS, Form 16A or Form 16 details. The Union Budget 2018 has, in fact, proposed to withdraw the practice of ITR assessment where an assessee used to get an income tax notice automatically if his/her Form 26AS, Form 16A or Form 16 details did not match with the income furnished in the ITR.

It may be noted that as per the current income tax laws, the clause (a) of section 143(1 provides that at the time of processing of income tax return, the total income or loss shall be computed only after making the adjustments which are specified in sub-clauses (i) to (vi) thereof. The Sub-clause (vi) of the above-mentioned clause provides for adjustment with respect to mismatch in the income of Form 26AS or Form 16A or Form 16 and the income tax return filed.

In simple words, “the Income Tax Department can compare the income returned in ITR with the income appearing in Form 26AS or Form 16A or Form 16 and provides for addition of income accordingly. Due to this power, the I-T department used to send system-generated intimations to the taxpayers. The assessee was required to respond to it online within 30 days,” says CA Abhishek Soni, Founder, tax2win.in.

Now, with a view to restrict the scope of adjustments, it is proposed to insert a new proviso to the clause (vi) of subsection (1) of Sec 143 to provide that no adjustment in regard to mismatch shall be made in respect of any return furnished on or after the assessment year commencing on the first day of April 2018.

“The earlier provision was to probe the genuine cases where an individual has forgotten to give complete details to his employer or where the TDS return has been filed with error or the like cases. With the insertion of proviso, the unnecessary cost and time which used to be involved in the genuine cases as per the existing provisions shall surely be mitigated,” says Soni.

To sum up, we can say that if this tax proposal of the Budget 2018 is passed by the Parliament, then it will restrict the tax authorities from making any adjustments in regard to the mismatch between ITR and Form 26AS, Form 16 and Form 16A for the returns filed for AY 2018-19 (FY 2017-18) and after. However, “the adjustments for the I-T returns filed up to AY 2017-18 (FY 2016-17) shall continue to be applicable as per the current law,” informs Soni.


Source by financialexpress..


About rajtechnews