ITD Alerts Taxpayers to Income Discrepancies - What You Need to Know
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The Income Tax Department (ITD) has sent an advisory to taxpayers regarding potential income discrepancies in their transactions. According to the ITD, the communication is not an enforcement notice but rather an opportunity for taxpayers to voluntarily correct any errors. The advisory aims to inform taxpayers about the information available with the ITD regarding transactions reported by reporting entities during the year. The ITD has observed discrepancies in certain cases where there is a significant gap between disclosures in the income tax return and the information received from reporting entities. Taxpayers who have received the advisory are advised to review their Annual Information Statement (AIS) and provide feedback on the online compliance portal. They can also revise their already filed returns or file belated returns if necessary. The deadline for revising or filing belated returns for the assessment year 2025-26 is December 31, 2025. The ITD urges taxpayers to respond promptly if discrepancies exist in their income tax returns. The ITD has also launched the 'NUDGE' initiative, which aims to guide taxpayers in correctly reporting foreign assets and income. Under the Income Tax Act of 1961 and the Black Money Act of 1987, accurate disclosure of foreign assets and income is mandatory, and failure to do so may result in penalties.
