Silly mistakes often creep in when one is trying to beat a deadline. Like the deadline for filing taxes every year. Since 2015, when the tax department turned up the heat on compliance and introduced a computer-aided selection system for pulling up cases for scrutiny, the number of tax notices sent out on account of discrepancies in the income tax returns (ITR) filed shot up. You could have received a demand notice for anything from failing to report interest income to erroneously leaving a mandatory field empty. But all that is now set to change.
From now on, the taxman will not issue a demand notice in cases of a minor mismatch between a taxpayer's ITR and the corresponding tax credit data collected from banks and other financial institutions. The measure, introduced in the latest Financial Bill, aims to ease out issues of small discrepancies that sometimes crop up between the information on Form-16 (provided by the employer) and Form-26AS, the tax credit statement received by the tax department. This is certainly good news for the salaried class, often harried by the additional paperwork generated by such demand notices.
"We trust the taxpayer and the step is aimed to make easy the processing of income tax returns," said CBDT Chairman Sushil Chandra adding that the policy measure will be applicable for all returns filed in the upcoming assessment year (2018- 19), commencing on April 1.
A senior I-T official explained that the Central Board of Direct Taxes (CBDT), the policy-making body for the tax department, proposed the move to the Finance Ministry as hundreds of such cases were stuck in final processing stage on account of ongoing communication between the taxpayer and the taxman. "There could be genuine reasons for such mismatches and hence it was decided to change the existing procedure in this context," the official said.
Chandra, however, has made it clear that all cases where the mismatch amount is high or those that arouse any sort of suspicion of tax evasion, will be taken up for a detailed scrutiny and a demand notice can follow.
As per the existing procedure, the notices are issued by the I-T Department's central processing centre (CPC) located in Bengaluru. It is the repository to process ITRs.
But even though the threat of a demand notice has been eliminated, it is important to file your returns without any mistakes. You can rectify any mistakes that creep in before March 31 of the relevant assessment year. So tax returns filed for this financial year can be revised latest by March 31, 2019. All you will need to do is to log in to the Income Tax e-filing portal and click on the option saying 'e-file in response to Section 139(9)'. A page will open where you can change the info accordingly.
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