Income Tax Returns Mismatch: Did You Receive Message From Income Tax Department Over ITR Discrepancies? Know What It Means and How To Resolve the Mismatch

Mumbai, December 24: The Income Tax Department has intensified its scrutiny of financial data, leading to a surge in messages sent to taxpayers regarding discrepancies between their filed Income Tax Returns (ITR) and information available through sources like the Annual Information Statement (AIS), Taxpayer Information Summary (TIS), and Form 26AS. These alerts, crucial for maintaining tax compliance, require prompt attention from individuals to avoid potential penalties and ensure accurate reporting.

This proactive approach by the tax authorities leverages advanced data analytics to identify mismatches, aiming to promote transparency and voluntary compliance among taxpayers. Ignoring these communications can lead to further scrutiny and potential legal consequences. Income Tax Refund Rules: When Interest on Delayed Refunds Is Not Payable, Check Details.

Understanding the Mismatch Alerts

A mismatch message from the Income Tax Department indicates that the income, deductions, or other financial transactions reported by a taxpayer in their ITR do not align with the information received by the department from various third-party sources. These messages are not always formal notices but serve as preliminary intimations, urging taxpayers to verify their records.

The primary objective is to highlight potential errors or omissions in the filed return, giving taxpayers an opportunity to rectify them before the department initiates further action.

Key Data Sources for Comparison

The Income Tax Department cross-references a taxpayer's ITR data with several comprehensive financial statements to identify discrepancies. The most critical of these include:

Annual Information Statement (AIS): This is a comprehensive statement covering a wide range of financial transactions undertaken by a taxpayer during a financial year. It includes details of salaries, interest income, dividends, mutual fund transactions, securities transactions, property purchases/sales, foreign remittances, and more. AIS is designed to provide a holistic view of a taxpayer's financial footprint.

Taxpayer Information Summary (TIS): TIS is an aggregated summary of the information available in AIS, categorised for easy understanding. It provides a consolidated view of various income categories and deductions, making it simpler for taxpayers to compare with their ITR.

Form 26AS: This statement primarily reflects details of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) against the taxpayer's Permanent Account Number (PAN). It also includes details of advance tax, self-assessment tax, and high-value transactions reported by specified entities.

The department's systems automatically compare the figures reported in the ITR with the data compiled from these statements. Got a Tax ‘Nudge’ Email? Know Why Income Tax Department Is Sending Intimations.

Know Why Discrepancies Occur

Several common reasons can lead to a mismatch alert:

Omission of Income: Taxpayers might inadvertently miss reporting certain income sources, such as interest from savings accounts, fixed deposits, or dividends, especially if the amounts are small or not subject to TDS.

Incorrect Data Entry: Errors during the manual entry of figures in the ITR can lead to differences.

Lack of Awareness: Some taxpayers may not be fully aware of all transactions that are reportable in their ITR, particularly those captured comprehensively in AIS.

Third-Party Reporting Errors: While less common, there can be instances where the entity reporting the transaction (e.g., a bank or employer) makes an error in their submission to the tax department.

Timing Differences: Sometimes, a transaction reported by a third party in one financial year might be accounted for by the taxpayer in the subsequent year, leading to a temporary mismatch.

Steps Taxpayers Can Take After Receiving Message from the IT Dept

Upon receiving a mismatch message, taxpayers should take the following immediate actions:

• Do Not Ignore: The most crucial step is to acknowledge and address the message promptly. Ignoring it can escalate the situation.
• Access E-filing Portal: Log in to the Income Tax e-filing portal using your credentials.
• Review AIS, TIS, and Form 26AS: Thoroughly check the AIS, TIS, and Form 26AS for the relevant financial year. These documents are accessible under the "Services" or "Annual Information Statement (AIS)" tab on the portal.
• Compare with ITR: Carefully compare the details in AIS, TIS, and Form 26AS with the income and deductions reported in your filed ITR. Identify the specific areas where the discrepancy lies.

How to Resolve the Mismatch

Once the discrepancy is identified, taxpayers have two primary courses of action:

File a Revised Return: If, upon review, you find that your original ITR was indeed incorrect (e.g., some income was missed, or deductions were wrongly claimed), you should file a revised Income Tax Return. This correction should be made within the permissible period, typically by December 31st of the assessment year following the financial year for which the return was filed.

Submit an Online Response: If your filed ITR is accurate and the discrepancy arises from incorrect information in AIS/TIS, or if a transaction is not taxable for a specific reason, you can submit an online response through the e-filing portal. The portal provides a facility to provide feedback on specific transactions listed in AIS/TIS. You can explain why the reported transaction does not match your ITR, providing supporting documentation if necessary.

It is vital to provide clear, concise, and accurate explanations for any discrepancies.

Consequences of Non-Compliance

Failing to address a mismatch alert can lead to severe consequences:

Further Scrutiny: The department may initiate a more detailed assessment, potentially issuing official notices under relevant sections of the Income Tax Act (e.g., Section 143(2) for scrutiny assessment or Section 148 for income escaping assessment).

Penalties: Taxpayers found to have under-reported income or claimed incorrect deductions may face penalties, which can be a percentage of the tax evaded.

Interest: Interest may be levied on the additional tax liability for the period of default.

Legal Action: In cases of significant discrepancies or deliberate misreporting, legal proceedings could be initiated.

Proactive Measures for Future Compliance

To avoid future mismatch alerts, taxpayers should adopt proactive measures:

Regular AIS/TIS Review: Before filing your ITR, make it a habit to download and thoroughly review your AIS and TIS for the relevant financial year.

Maintain Records: Keep meticulous records of all financial transactions, including income statements, bank statements, investment proofs, and deduction-related documents.

Reconcile Data: Regularly reconcile your personal financial records with the information available on the Income Tax portal.

Seek Professional Advice: If you have complex financial transactions or are unsure about reporting requirements, consult a qualified tax professional.

By understanding the significance of these mismatch messages and taking timely, appropriate action, taxpayers can ensure compliance, avoid penalties, and contribute to a transparent tax ecosystem.

(The above story first appeared on LatestLY on Dec 24, 2025 08:59 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).