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Received message for High Value Transactions from IT Department? Don't Panic

We are discussing about a message campaign for High Value Transactions that has created a chaos among the taxpayers

 
 

Another message by the Income tax Department creating chaos, filled up my inbox today evening, when my clients started sending me the messages that said " Attention Taxpayer (PAN XXXXX1234X), Income Tax Department has received information about certain high value financial transactions relating to FY 2020-21. Please view transactions under e-Campaign tab on Compliance Portal (CP) and remember to pay appropriate advance tax. Access CP by logging into e-filing portal and clicking on 'Compliance Portal' link under 'My Account' tab - ITD". To avoid replying to everyone one by one I drafted a standard reply to them "Don't worry, not an issue. I will discuss. Everyone has received this message." Therefore, I thought of clearing the clouds over this message.

The question among the taxpayers is "I haven't indulged in any high value transactions. How and why am I receiving this message?" Rest assured, it's not you who is wrong, it's that in the present times of flow of information to the Income Tax Department, they are seating on a heap of information from GSTIN, TDS department, revenue department as well as the banks and mutual fund houses. Now this information when accumulated together leads to high value. When you go through the data you will find that 90% of the transactions are business transactions which is reported due to your purchases being reflected by your supplier in his GSTR1 and the rest 5% transactions are transactions reported in TDS and TCS returns.

This message is not new. This message campaign is being run by the Income Tax Department in the month of March since last year before the due date for payment of last installment of advance tax i.e., 15th of March.

What is the purpose of this message?


There can be other purposes also, but what comes first to my mind is,


1) To reconcile the information collected from various sources with the taxpayer.

2) To remind the taxpayer that you have done high value financial transactions during the year, so in case you need to pay advance tax, please pay it.

3) To increase the compliance burden on the taxpayer to file one more information to the Income Tax department.

What has to be done if I received this message?


The message itself answers the question, but for the sake of convenience I answer this query. You need to take the following steps to reply to the Income Tax Department.

Step 1: Log in to https://www.incometaxindiaefiling.gov.in/home with your PAN and e-filing password.

Step 2: Navigate to Compliance tab and click on Compliance Portal. It will ask to confirm on being redirected to compliance portal. Click on Confirm.

Step 3: Among several columns, click on e-campaign. You will see red notification appearing on that column.

Step 4: Select financial year. Information summary for that Financial Year will come in terms of "Business transactions" and "Other source Income"

Step 5: Click on either of the transaction type. Detail information on the transactions reported will appear on the next screen. Reconcile this information with data available with you.

Step 6: Submit your response by selecting appropriate response whether that information is correct, not fully correct, relates to other person/Year, information is duplicate, or the information is denied.

Step 7: You may submit bulk information if you find all the information is correct or if you find all the information as denied.

After submitting the response either one by one or in bulk, the compliance is done.

In my view it's one more compliance burden on the taxpayer to ask for the information which is already getting validated by other departments like GST and TDS. These information's are also taken care of by the taxpayers in his Income Tax Audit and returns. However, you must not ignore it and go through it, reconcile it with your data and submit the response.


For any query or assistance, you may contact us. We will be happy to help you.



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