In the last 1 or 2 days many people must have received such e-mail from Income tax department in relation to TDS and TCS filing and people are confused as to whether any action needs to be taken or not. So let’s first see the e-mail that is being received from TDS department:
Income Tax Department relies on non-intrusive means of helping taxpayers file their returns of income accurately and timely. We are grateful for the Statements of Financial Transactions/TDS/TCS filed by you.
From these statements, the information of financial transactions of taxpayers who are your clients/ business associates is gathered, collated and is made available electronically to the taxpayer through the Annual Information Statement (AIS). Taxpayer is now facilitated to raise an objection to a transaction reported through the AIS. In case of an information which is objected to by the taxpayer, we seek your help in resolving the issue with a quick electronic response to a communication which will be sent to you in such cases under the e-Verification Scheme, 2021 (the Scheme). Your prompt response to the clarification sought will help taxpayers.
This process will be conducted under the e-Verification Scheme, 2021 notified on 13th December 2021. Presently data pertaining to FY 2019-20 is under verification. The salient features of the Scheme are explained in attached Annexure – A. We seek your help and cooperation in the successful implementation of the Scheme.
With increased digitalization, it is important to provide data with accuracy. Please avail of the PAN authentication facility to help you report correct PAN in the transactions reported. (https://incometaxindia.gov.in/Pages/tax-services/online-pan-verification.aspx)
We call upon you to be our active partners in strengthening Digital India. Thanking you for your active support and wishing you a very Happy 2023.
Annexure – A
The key features of the e-Verification Scheme 2021 are:
1. Information gathered from Source/ Reporting Entity is pushed to taxpayer for viewing in AIS and taxpayer can raise an objection if he/she believes that the transaction is incorrectly attributed to the taxpayer (fully/partially).
2. Commissioner of Income Tax (e-Verification) [henceforth referred as CIT(e-V)] pushes the disputed information back at the Source/ Reporting Entity for confirmation.
3. If Source/ Reporting Entity agrees that information uploaded was incorrect and agrees with taxpayer, then CIT(e-V) closes the matter. Source/Reporting entity is required to modify the statement in which the incorrect data was filed.
4. If Source/ Reporting Entity stands by the information and reports back to CIT(e-V) then the case is sieved through Risk Assessment module.
5. If required to be verified, the Directorate of Income Tax (I&CI) will contact the taxpayer and verify the transaction with reference to the return of income filed/ not filed by the taxpayer.
6. Based on the response of the taxpayer to the proceedings under the Scheme, the Source/Reporting Entity may be contacted once again, if required, by the officer in Directorate of Income Tax (I&CI) who is conducting the verification.
CPC (TDS) TEAM“
So, if we go through the e-mail it is mostly regarding a new feature being introduced by the Income tax department which is now integrated with AIS generated by Income tax department whereby if any deductee i.e. the person whose TDS has been deducted has any issue with the amount of income shown or TDS deducted he can give a feedback for same and TDS-CPC will intimate the deductor to respond to such queries.
Hence, this will make queries related to TDS mismatch much lesser. However, this will only work if the deductee raises a complaint or issue and if the deductor does not responds the changes proposed by deductee is accepted by Income tax department and same is reflected in Form 26AS also which can reduce assessment and incorrect intimation.
So, let’s see how this will work out in the future once it is implemented fully as of now it is only for FY 2019-20.
Thus, this e-mail is just an announcement of new feature by TDS-CPC or Income tax department and needs no action by the deductor.