Project checks discrepancies in reporting of interest income earned of over ₹5,000

Hundreds of bank deposit holders across the country were non-plussed on Wednesday by an Income Tax Department message to check for discrepancies in reporting their interest income.

Identified as high-value information under a new functionality called ‘Special Pilot Project (SPP)-Interest’, the account holders were told to clear “tax dues” by March 31. The I-T department had launched the pilot project to check for discrepancies in reporting interest income by taxpayers. Under the project, the department had asked banks to provide details of customers who had earned interest income of over ₹5,000 in Assessment Year 2020-21.

On matching the data sourced from the banks with that of the income-tax returns filed, the department detected under-reporting and sent out emails and SMSes to the assessees to rectify the mistake.

“The Income Tax Department has identified high-value information which does not appear to be in line with the Income Tax Return filed for Assessment Year 2020-21 (relating to FY 2019-20). Please revise ITR/submit online response under e-Campaign tab on Compliance Portal (CP). Access CP by logging into e-filing portal and clicking on ‘Compliance Portal’ link under ‘My Account’ or ‘Compliance’ tab – ITD,” reads the SMS sent to assessees over the past few days.

This left a number of bank account holders, especially senior citizens, anxious. “I received the message on the weekend and Monday was a holiday. How does the Tax Department expect senior citizens and pensioners to check discrepancies, rectify them and pay the dues by March 31. In my case, I checked with the bank and there is a case of double counting,” said an octogenarian residing in Mumbai.

Double counting

“Banks had shared the details of cumulative interest that exceeds ₹5,000 per person in FY 2019-20 to the Income Tax office as per its specified format. It is observed that some amount reported in high-value transaction is duplication of entries, and customers are approaching the banks to rectify the same. The matter has been taken up with the Income Tax Department immediately, and it has assured to rectify it at the earliest,” said a banking source

Mihir Ashok Tanna, Associate Director (Direct tax), SK Patodia and Associates, an audit firm, said the Central Board of Direct Taxation is flooded with requests to extend the deadline for filing the revised return for the past fiscal as the website crashed on Wednesday. In most cases, banks have provided wrong data on interest earned by customers and there were also mistakes in entry of customers’ PAN details and interest income, adding to the confusion, he added. Another tax expert said that in some cases, the Tax Department’s communication is legitimate.

Source : https://www.thehindubusinessline.com/news/reporting-interest-income-i-t-dept-message-to-revise-itr-baffles-tax-payers/article34208713.ece