Today March 15 is advance tax deadline: Has CBDT fixed inflated income data in AIS Compliance portal?

Today, i.e., March 15, 2024, is the last day to pay the fourth quarterly advance tax instalment for FY 2023-24. However, many taxpayers are worried because they have been facing problems in figuring out their tax liability through the AIS (Annual Information Statement) compliance portal, as it has been showing highly inflated data for certain specific types of transactions. The Central Board of Direct Taxes (CBDT) has said on its website that the inconsistent data(s) have been fixed and now the correct data has been updated as of March 15, 2024.

“You are also requested to compute your Advance Tax liability and pay the same on/before 15th March 2024. Data pertaining to Information categories ‘Sale of securities and units of mutual fund’, ‘Purchase of securities and units of mutual funds’, ‘Off market credit transactions’ & ‘Off market debit transactions’ has been updated, kindly check the same in AIS. Taxpayers are recommended to verify the correctness of the information displayed in AIS by providing the feedback,” said CBDT on their website as of March 15, 2024, 4pm.

Also read: How selling equities before March 31 can help you save income tax.

Experts commend CBDT for fixing the issue within a week. “Failure to address these errors promptly could lead to a higher advance tax liability for taxpayers, as their incomes may be inaccurately inflated due to the erroneous data presented on the AIS Compliance Portal. Hence, the tax department expedited the resolution process to prevent undue financial burden on taxpayers,” says Sandeep Agrawal, co-founder, TeamLease RegTech, a regulatory compliance company.

According to Mihir Tanna, associate director, S.K Patodia LLP, a CA firm, “Earlier this week our clients were shocked to see a mismatch between AIS data and their own data. These mismatches ran into crores. However as of today all the mismatches have been fixed.”

Also read: Income Tax dept is calculating your advance tax liability by tracking these financial transactions.

What should taxpayers do now?

Experts say that taxpayers should remain vigilant now and proactively engage with the tax department through the feedback option in the AIS Compliance Portal. “It’s plausible that certain errors may persist despite efforts to rectify them. In such cases, taxpayers should utilise the feedback option provided on the Compliance Portal to notify the tax department about the discrepancies observed. Taxpayers should provide detailed information regarding the errors encountered and supporting evidence to facilitate prompt resolution by the authorities,” says Agrawal.

Penalty for not paying advance tax

Penal interest under section 234B of the income-tax Act is levied if there is any default in payment of advance tax, whereas penal interest under section 234C is levied for deferment in payment of advance tax.

Who is not required to pay advance tax?

Not all taxpayers are required to pay any advance tax. The following categories of taxpayers are exempt from paying any advance tax:

• Senior citizens: Those who do not have any income from business or profession are exempt from paying advance tax, or
• Presumptive taxation scheme: Taxpayers who have opted for the presumptive taxation scheme under section 44AD or 44ADA must pay their entire income tax amount in one instalment on or before March 15 of the financial year.

Today, i.e., March 15, 2024, is the final day to pay the fourth quarterly advance tax instalment for FY 2023-24. Many taxpayers are concerned about their tax liability calculation issues through the AIS (Annual Information Statement) compliance portal. The Central Board of Direct Taxes (CBDT) has resolved the inconsistent data problem and updated the correct information as of March 15, 2024.

“It is advised to calculate your Advance Tax liability and make the payment by March 15, 2024. The data related to specific information categories has been updated, please verify the information displayed in AIS,” stated CBDT on their website as of March 15, 2024, 4pm.

Read also: How selling equities before March 31 can help you save income tax.

Experts appreciate CBDT for quickly addressing the issue within a week. “Failure to rectify these errors promptly could result in higher advance tax liabilities for taxpayers. The tax department expedited the resolution process to avoid undue financial burden on taxpayers,” said Sandeep Agrawal, co-founder of TeamLease RegTech.

According to Mihir Tanna from S.K Patodia LLP, “Earlier this week, our clients were alarmed by the mismatches in AIS data. However, all discrepancies have been resolved today.”

Read also: Income Tax dept is calculating your advance tax liability by tracking these financial transactions.

What should taxpayers do now?

Experts recommend remaining vigilant and engaging with the tax department through the feedback option in the AIS Compliance Portal. “If errors persist, taxpayers should provide detailed feedback and evidence for prompt resolution by the authorities,” advises Agrawal.

Penalty for not paying advance tax

Penal interest may be levied under sections 234B and 234C of the income-tax Act for default or deferment in advance tax payment.

Who is exempt from paying advance tax?

Senior citizens without business income and taxpayers under the presumptive taxation scheme are not required to pay advance tax.