Compliance Portal: Tax liability for Commodity transaction

A taxpayer can receive a notice/query from the ITD regarding their commodity transactions. Thus, taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Hence, taxpayers can receive the SMS for three reasons:

  1. Not filed ITR or even if the ITR is not filed in an AY where there is a potential tax liability pending.
  2. Details provided by the taxpayer and information received by the ITD don’t match for that particular assessment year.
  3. Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.
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Commodity transactions are similar to Securities transactions. Transactions that get settled in an alternate method than by actual agreed upon delivery are treated as Speculative transactions. Speculative transactions are exempted from tax. however, some Speculative transactions an eligible in respect of trading in commodity derivatives carried out in a recognized association, which is chargeable to commodities transaction tax is not considered a speculative transaction.

Business Income u/s 28 to 43C and Income from capital gains u/s 45 to 55A can be levied on commodity transactions.

Taxpayers who have received any such verification issue needs to submit a response on those issues raised. Additionally, this response has to be submitted online by logging into the compliance portal.

Verification issue in the computation of Commodity transactions’ tax liability

Code Description Response
A1 Total receipts as per taxpayer pertaining to the above information Amount
A2 Less: Amount relating to another year/PAN  PAN year-wise list
A3 Less: Amount covered in other information Amount
A4 Less: Exemption/Deduction/Expenditure/ Set off of Loss Exemption/Deduction wise list
A5 Income/Gains/Loss (A1-A2-A3-A4) Computed

A1- Total receipts:

The gross value of transactions in commodities should certainly be included and a final amount needs to be mentioned.

A2- Amount relating to other year or PAN:

 If part of the receipts relates to someone else’s PAN or is considered for some other year then the List of details of such receipts are to be mentioned as per the table below:

A3- Amount repeatedly covered:

 If any amount is mistakenly covered twice then it should be mentioned under the Remarks section of the previous table. Hence, this will nullify the repeated Income/Gains/Loss covered.

A4- Exemption/Deduction/Expenditure/Set off of loss:

This section has to include gross salary and a list of all the available allowances which are exempt. Therefore, the taxpayer needs to select the correct category from the drop-down list as under:

  • Cost of acquisition u/s 48.
  • Expenditure incurred wholly and exclusively in connection with transfer u/s 48.
  • Deductions from capital gains u/s 54EC/54EE/54F.
  • Set off of Loss.
  • Others.

The details are to be submitted as per the table mentioned below:

A5- Income/Gain/Loss:

This section includes the self-computation of commodity transactions chargeable to tax A5=(A1-(A2+A3+A4)). If your income computation exceeds the minimum of 2.5 lakh then you should file your ITR.

FAQs

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues it will certainly be pushed to the compliance portal for e-verification. Additionally, Email and SMS will be sent to the taxpayer informing about the issue raised. Then, the taxpayers need to respond to those issues raised.

Is it necessary to Compliance Portal? What happens if I don’t log in?

Yes, it is certainly advisable to log in to the compliance portal. However, if a taxpayer doesn’t login he/she will not be able to respond to the issues raised.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. And thereafter, the taxpayer needs to respond to the additional query request as well.

Compliance Portal: Tax liability from Investment in Securities

When a taxpayer earns any income through investment in securities they incur a tax liability for these transactions. This income can be considered as Business Income or Capital gains. This is determined depending upon the nature of security, nature of the transaction, the period of holding, etc. Some of such transaction types are mentioned below:

  • Speculative transactions: Transactions in which a contract for the purchase/sale of commodity or scripts is executed not by actual delivery but by an alternative method is treated as speculative transactions.
  • Business Income: Income generated by dealing in shares is treated as business income.
  • Long-term capital gain: Income generated from dealing in equity shares, equity-oriented mutual funds or units of a business trust that is exempt under section 10(38) provided the transaction is subjected to Securities Transaction Tax. Tax is chargeable @20% on other long-term capital gains. However, in the case of listed securities, tax can be paid @10% on gains computed without indexation. Short-term capital gain in such cases is chargeable @15%.
  • Short term capital gains: In case of other short-term capital gains, tax is leviable as per the regular income slabs.
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Taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:

  1. Not filed ITR or The ITR is not filed in the given assessment year and has potential tax liability pending.
  2. Details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
  3. Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.

Taxpayers who have received any such verification issue needs to submit a response on those issues raised. The response has to be submitted online by logging into the compliance portal.

Verification issue in the computation of tax liability on Investment in securities

Code Description Response
A1 Total receipts as per taxpayer pertaining to the above information Amount
A2 Less: Amount relating to another year/PAN  PAN year-wise list
A3 Less: Amount covered in other information Amount
A4 Less: Exemption/Deduction/Expenditure/ Set off of Loss Exemption/Deduction wise list
A5 Income/Gains/Loss (A1-A2-A3-A4) Computed

A1- Total receipts:

Any gross value of the transaction in securities should be included and a final amount should be mentioned.

A2- Amount relating to other year or PAN:

 If part of the gross receipts relates to someone else’s PAN or is considered for some other year then the List of details of such receipts are to be mentioned as per the table below:

A3- Amount repeatedly covered:

 If any amount is mistakenly covered twice then it should be mentioned under the Remarks section of the previous table. This will nullify the repeated Income/Gains/Loss covered.

A4- Exemption/Deduction/Expenditure/Set off of loss:

This section has to includes a list of all the available allowances which are exempt. The taxpayer needs to select the correct category from the drop-down list as under:

  • Exempt Long-term Capital Gain on shares u/s 10(38)
  • Cost of acquisition u/s 48.
  • Expenditure incurred wholly and exclusively in connection with transfer u/s 48.
  • Deductions from capital gains 54EC/54EE/54F
  • Set off of Loss
  • Others

The details are to be submitted as per the table mentioned below:

A5- Income/Gain/Loss:

This section includes the self-computation of securities transactions chargeable to tax A5=(A1-(A2+A3+A4)). If your income computation exceeds the minimum of 2.5 lakh then you should file your ITR.

FAQs

Is it necessary to login to Compliance Portal? What happens if I don’t log in?

Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.

What are the different types of transactions in securities?

Speculative transactions: Transactions in which a contract for the purchase/sale of commodity or scripts is executed not by actual delivery but by an alternative method is treated as speculative transactions.
Business Income: Income generated by dealing in shares is treated as business income.
Long-term capital gain: Income generated from dealing in equity shares, equity-oriented mutual funds or units of a business trust that are exempt under section 10(38) provided the transaction is subjected to Securities Transaction Tax. Tax is chargeable @20% on other long-term capital gains. However, in the case of listed securities, tax can be paid @10% on gains computed without indexation. Short-term capital gain in such cases is chargeable @15%.
Short term capital gains: In case of other short-term capital gains, tax is leviable as per the regular income slabs.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. The taxpayer needs to respond to the additional query request as well.

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues it will be pushed to the compliance portal for e-verification, Email and SMS will be sent to the taxpayer informing about the issue raised. Taxpayers then need to respond to those issues raised.

Compliance Portal: Tax liability on Expenditure

A query by the ITD may be raised on expenditures like family functions, foreign travel, foreign education, expensive hotels/restaurants, etc. These are some expenses where income gets utilized. The taxpayers who have spent a significant amount on such expenditures have to quote their PANs in such transactions. Some of the above-mentioned expenses are to be reported as well through AIR or SFT. Expenditures are an indicator of assessee’s lifestyle and standard of living. Any unexplained expenditure can also be deemed to tax in hands of the assessee for that Financial Year.

Taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:

  1. Not filed ITR or The ITR is not filed in the given assessment year and has potential tax liability pending.
  2. Details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
  3. Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.

Taxpayers who have received any such verification issue needs to submit a response on those issues raised. The response has to be submitted online by logging into the compliance portal.

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Verification issue in the computation of tax liability from Expenditure

Code Description Response
A1 Correct Information Value Amount + Remarks
A2 Out of earlier income or savings Amount + Remarks
A3 Out of receipts exempt from tax Exempt income-wise list
A4 Received from identifiable persons (without PAN) PAN wise list
A5 Received from identifiable persons (without PAN) Person wise list 
A6 Received from un-identifiable persons Nature of transaction wise list 
A7 Others Amount + Remarks
A8 Unexplained amount A1- (A2+A3+A4+A5+A6+A7)

A1- Correct Information value

The total of all the amount paid for the purchase of the property has to be mentioned here. The purchase amount and all the expenses like stamp duty etc. In the case of co-ownership, the taxpayer should mention his/her share of investment and give details like name, PAN and share of other co-owners under the remarks section.

A-2 Out of earlier income or savings

If any part of the investment or expenditure is made out of earlier income or savings then it should be mentioned with the amount under this category. Suitable remarks are also required under the remarks section.

A3- Out of receipts exempt from tax

Available exemptions are listed below in the drop-down list. After choosing the relevant exemption the value of the receipt will be determined.

  • Interest income u/s 10.
  • Dividend income u/s 10(34)
  • Long-term capital gains on shares u/s 10(38).
  • Agricultural income u/s 10(1).
  • Share in the total income of firm/AOP etc. u/s 10(2A)
  • Income is not taxable in India.
  • Others

If this field is selected you will be displayed the following rows:

A4- Received from identifiable persons (with PAN)

If any amount is received from an identifiable person who holds a valid PAN, then his/her details are to be mentioned as per the following table:

The Transaction Type consists of:

  • Sales
  • Loan Received
  • Loan Repayment
  • Gift Received
  • Donation Received
  • Other Receipt.

The Transaction Mode consists of two options i.e ‘Cash’ and ‘Non-cash’. More rows can be added by clicking on the button ‘Add Row’. Suitable remarks are to be provided under the remarks section.

A5- Received from identifiable persons (without PAN)

If any amount is received from an identifiable person who doesn’t hold a PAN, then his/her details are to be mentioned as per the following table:

A6- Received from un-identifiable person

If any amount is received from an unidentifiable person, then his/her details are to be mentioned as per the following table:

A7- Others

If any amount which was not covered in any of the above-mentioned categories then it should be mentioned here. Suitable remarks are to be provided under the remarks section.

A8- Unexplained amount

This section computes a figure (A1 – (A2+A3+A4+A5+A6+A7)), for which no explanation is provided.

FAQs

Is it necessary to login to Compliance Portal? What happens if I don’t log in?

Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. The taxpayer needs to respond to the additional query request as well.

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues it will be pushed to the compliance portal for e-verification, Email and SMS will be sent to the taxpayer informing about the issue raised. Taxpayers then need to respond to those issues raised.

Compliance Portal: Tax liability on Cash Deposits

The taxpayers who have a large sums of cash deposits have to file the Income Tax Return. As per rule 114B, disclosure of PAN is mandatory in some transactions if cash of Rs.50,000/- or more is involved. Section 269SS has been further amended to include amounts received on the sale of a property. Statement of Financial Transaction (SFT) is required to be filed in respect of specified cash transactions.

Taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:

  1. Not filed ITR or The ITR is not filed in the given assessment year and has potential tax liability pending.
  2. Details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
  3. Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.

Taxpayers who have received any such verification issue needs to submit a response on those issues raised. The response has to be submitted online by logging into the compliance portal.

Verification issue in the computation of tax liability for Cash Deposits

Code Description Response
A1 Correct Information Value Amount + Remarks
A2 Out of earlier income or savings Amount + Remarks
A3 Out of receipts exempt from tax Exempt income-wise list
A4 Received from identifiable persons (without PAN) PAN wise list
A5 Received from identifiable persons (without PAN) Person wise list 
A6 Received from un-identifiable persons Nature of transaction wise list 
A7 Others Amount + Remarks
A8 Unexplained amount A1- (A2+A3+A4+A5+A6+A7)

A1- Correct Information value

The total of all the amount paid for the purchase of the property has to be mentioned here. The purchase amount and all the expenses like stamp duty etc. In the case of co-ownership, the taxpayer should mention his/her share of investment and give details like name, PAN and share of other co-owners under the remarks section.

A-2 Out of earlier income or savings

If any part of the investment or expenditure is made out of earlier income or savings then it should be mentioned with the amount under this category. Suitable remarks are also required under the remarks section.

A3- Out of receipts exempt from tax

Available exemptions are listed below in the drop-down list. After choosing the relevant exemption the value of the receipt will be determined.

  • Interest income u/s 10.
  • Dividend income u/s 10(34)
  • Long-term capital gains on shares u/s 10(38).
  • Agricultural income u/s 10(1).
  • Share in the total income of firm/AOP etc. u/s 10(2A)
  • Income is not taxable in India.
  • Others

If this field is selected you will be displayed the following rows:

A4- Received from identifiable persons (with PAN)

If any amount is received from an identifiable person who holds a valid PAN, then his/her details are to be mentioned as per the following table:

The Transaction Type consists of:

  • Sales
  • Loan Received
  • Loan Repayment
  • Gift Received
  • Donation Received
  • Other Receipt.

The Transaction Mode consists of two options i.e ‘Cash’ and ‘Non-cash’. More rows can be added by clicking on the button ‘Add Row’. Suitable remarks are to be provided under the remarks section.

A5- Received from identifiable persons (without PAN)

If any amount is received from an identifiable person who doesn’t hold a PAN, then his/her details are to be mentioned as per the following table:

A6- Received from un-identifiable person

If any amount is received from an unidentifiable person, then his/her details are to be mentioned as per the following table:

A7- Others

If any amount which was not covered in any of the above-mentioned categories then it should be mentioned here. Suitable remarks are to be provided under the remarks section.

A8- Unexplained amount

This section computes a figure (A1 – (A2+A3+A4+A5+A6+A7)), for which no explanation is provided.

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FAQs

Is it necessary to login to Compliance Portal? What happens if I don’t log in?

Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. The taxpayer needs to respond to the additional query request as well.

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues it will be pushed to the compliance portal for e-verification, Email and SMS will be sent to the taxpayer informing about the issue raised. Taxpayers then need to respond to those issues raised.

Compliance portal: Tax liability from Sale of Immovable property

The capital gain arising from the sale of immovable property of a capital asset is subjected to tax. Capital Gain tax u/s 45 of the Income Tax Act is to be levied on the sale. However, Capital gains are of two types i.e long term and short term. The tax liability will differ depending upon the type of capital gain.

Taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:

  1. Not filed ITR or The ITR is not filed in the given assessment year and has potential tax liability pending.
  2. Details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
  3. Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.

Taxpayers who have received any such verification issue needs to submit a response on those issues raised. The response has to be submitted online by logging into the compliance portal.

Verification issue in the computation of tax liability from Sale of Immovable Property

Code Description Response
A1 Total receipts as per taxpayer pertaining to the above information Amount + Remarks
A2 Value adopted or assessed for the purpose of payment of Stamp Duty Amount + Remarks
A3 The value is taken for computation of capital gains Amount + Remarks
A4 Less: Amount relating to another year/PAN  PAN year-wise list + Remarks
A5 Less: Amount covered in other information Amount + Remarks
A6 Less: Exemption/Deduction/Expenditure/ Set off of Loss Exemption/Deduction wise list + Remarks
A7 Income/Gains/Loss (A1-A2-A3-A4) Amount + Remarks

A1- Total receipts as per the taxpayer pertaining to the above information.

The gross value of the receivables/received payments against the transfer of the property is to be mentioned.

A2- Value adopted or assessed for the purpose of payment of stamp duty

The amount of stamp duty paid or payable is to be mentioned here. If there is no stamp duty value then the field should be left blank. As per section 50C or 43CA, if the sale amount is lower than the value taken for payment of stamp duty is to be considered for computing income.

A3- Value taken for computation of Capital Gains.

The value that has been considered for the computation of income is to be mentioned. If value taken for payment of stamp duty is higher than the sale amount and it is claimed that the former value exceeds the fair market value, then appropriate remarks are to be stated under the remarks section.

A4- Amount relating to another year/PAN.

If part of the income/receipts relates to someone else’s PAN or is considered for some other year then the List of details of such income is to be mentioned as per the table below:

A5- Amount repeatedly covered:

 If any amount is mistakenly covered twice then it should be mentioned under the Remarks section of the previous table. This will nullify the repeated Income/Gains/Loss covered.

A6- Exemption/Deduction/Expenditure/Set off of loss:

This section has to include a list of all the available allowances which are exempt. The taxpayer needs to select the correct category from the drop-down list as under:

  • Agricultural Land outside specified limits
  • Capital Gains:
    • Cost of Acquisition u/s 48
    • Cost of Improvement u/s 48
    • Expenditure incurred wholly and exclusively in connection with transfer u/s 48
    • Deductions from Capital Gains u/s 54/54B/54D/54EC/54EE/54F/54G/54GA/54GB
  • Set off of Loss
  • Others

The details are to be submitted as per the table mentioned below:

A7- Income/Gain/Loss:

This section includes the self-computation of income from house property chargeable to tax A5=(A1-(A2+A3+A4)). If your income computation exceeds the minimum of 2.5 lakh then you should file your ITR.

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FAQs

Is it necessary to login to Compliance Portal? What happens if I don’t log in?

Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. The taxpayer needs to respond to the additional query request as well.

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues it will be pushed to the compliance portal for e-verification, Email and SMS will be sent to the taxpayer informing about the issue raised. Taxpayers then need to respond to those issues raised.

Compliance Portal: Tax liability for House Property

If you have paid tax incorrectly on your house property you might receive a query to correct it. Hence, taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three instances:

  • Not filed ITR: ITR is not filed for the given assessment year and has a potential tax liability.
  • Mismatch in Details: Even if the details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
  • Reporting of Significant Transactions: The Income Tax department has details of significant transactions during a financial year which is considered abnormal or out of line with the profile of the taxpayer.

The basis of calculating Income from house property u/s 23(1) of the Income Tax Act is through calculating the annual value. For instance, the annual value of house property is the determination of rent received or the amount of rent which property can potentially earn if let out, whichever is higher.

Taxpayers who have received any such verification issue needs to submit a response on those issues raised. Additionally, the response has to be submitted online by logging into the compliance portal.

Verification issue in the computation of tax liability on House Property

Code Description Response
A1 Total receipts as per taxpayer pertaining to the above information Amount
A2 Less: Amount relating to another year/PAN  PAN year-wise list
A3 Less: Amount covered in other information Amount
A4 Less: Exemption/Deduction/Expenditure/ Set off of Loss Exemption/Deduction wise list
A5 Income/Gains/Loss (A1-A2-A3-A4) Computed

A1- Total receipts as per the taxpayer pertaining to the above information.

The gross value of the property can be let out. However, if the taxpayer has not received any rental payment they can show the amount as 0. But, suitable remarks are to be submitted under the remarks section.

A2- Amount relating to another year/PAN.

If part of the income/receipts relates to someone else’s PAN or is considered for some other year then the List of details of such income is to be mentioned as per the table below:

A3- Amount repeatedly covered:

 If any amount is mistakenly covered twice then it should be mentioned under the Remarks section of the previous table. Hence, this will nullify the repeated Income/Gains/Loss covered.

A4- Exemption/Deduction/Expenditure/Set off of loss:

This section has to certainly include a list of all the available allowances which are exempt. The taxpayer needs to then select the correct category from the drop-down list as under:

  • Amount of rent which cannot be realized u/s 23.
  • Tax paid to local authorities u/s 23
  • Deduction under section 24(a) @30%
  • Interest payable on borrowed capital u/s 24(b)
  • Set off of Loss
  • Others

The details are to be submitted as per the table mentioned below:

A5- Income/Gain/Loss:

This section includes the self-computation of income from house property chargeable to tax A5=(A1-(A2+A3+A4)). If your income computation exceeds the minimum of 2.5 lakh then you should file your ITR.

FAQs

Is it necessary to login to Compliance Portal? What happens if I don’t log in?

Yes, it is certainly advisable to log in to the compliance portal. However, if a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further clarification from the taxpayer. Therefore, the taxpayer needs to respond to the additional query request as well.

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues then it will be pushed to the compliance portal for e-verification. For instance, Email and SMS will be sent to the taxpayer informing about the issue raised. Then the taxpayers then need to respond to those issues raised.

Compliance Portal: Tax liability for Income from Other Sources

Income that doesn’t get covered in any major Income heads gets covered under Income from Other Sources. Hence, all income except income from house property, capital gain, business, and professional income are covered under this head u/s 56 and 57 of the Income Tax Act.

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In addition, taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:

  1. Not filed ITR or even if the ITR is not filed in the given assessment year but it has potential tax liability pending.
  2. Similarly, if the details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
  3. Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.

Taxpayers who have received any such verification issue needs to submit a response on those issues raised. Additionally, the response has to be submitted online by logging into the compliance portal.

Verification issue in the computation of tax liability for income from other sources

Code Description Response
A1 Total receipts as per taxpayer pertaining to the above information Amount
A2 Less: Amount relating to another year/PAN  PAN year-wise list
A3 Less: Amount covered in other information Amount
A4 Less: Exemption/Deduction/Expenditure/ Set off of Loss Exemption/Deduction wise list
A5 Income/Gains/Loss (A1-A2-A3-A4) Computed

A1- Total receipts as per the taxpayer pertaining to the above information.

The gross value of the receivables/received payments as other source income are to be mentioned.

A2- Amount relating to another year/PAN.

If part of the income/receipts relates to someone else’s PAN or is considered for some other year, then the List of details of such income is to be mentioned as per the table below:

A3- Amount repeatedly covered:

 If any amount is mistakenly covered twice then it should be mentioned under the Remarks section of the previous table. Hence, this will nullify the repeated Income/Gains/Loss covered.

A4- Exemption/Deduction/Expenditure/Set off of loss:

This section has to include a list of all the available allowances which are exempt. The taxpayer then needs to select the correct category from the drop-down list as under:

  • Expenses/ Deductions u/s 57.
  • Depreciation u/s 57.
  • Set off of Loss.
  • Others.

Most importantly, the details are to be submitted as per the table mentioned below:

A5- Income/Gain/Loss:

This section includes the self-computation of income from house property chargeable to tax A5=(A1-(A2+A3+A4)). Also, if your income computation exceeds the minimum of 2.5 lakh then you should file your ITR.

FAQs

Is it necessary to login to Compliance Portal? What happens if I don’t log in?

Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request. This is to seek further information/clarification from the taxpayer. Hence, the taxpayer needs to respond to the additional query request as well.

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues it will be pushed to the compliance portal for e-verification Email and SMS will be sent to the taxpayer informing about the issue raised. Taxpayers then need to respond to those issues raised.

Compliance Portal: Tax liability from Purchase of a movable asset

Taxpayers make substantial expenditure on the purchase of a movable asset in a lot of cases but have not filed their ITR. As per the Income Tax Act, any unexplained investment is considered as Income for that Financial Year u/s 69 and 69B.

Taxpayers who have received any such verification issue needs to submit a response on those issues raised. The response has to be submitted online by logging into the compliance portal.

Taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:

  1. Not filed ITR or The ITR is not filed in the given assessment year and has potential tax liability pending.
  2. Details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
  3. Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.

Verification issue in the computation of tax liability from the purchase of a movable asset

Code Description Response
A1 Correct Information Value Amount + Remarks
A2 Out of earlier income or savings Amount + Remarks
A3 Out of receipts exempt from tax Exempt income-wise list
A4 Received from identifiable persons (without PAN) PAN wise list
A5 Received from identifiable persons (without PAN) Person wise list
A6 Received from un-identifiable persons Nature of transaction wise list 
A7 Others Amount + Remarks
A8 Unexplained amount A1- (A2+A3+A4+A5+A6+A7)

A1- Correct Information value

The total amount of expenditure incurred in the transaction i.e purchase of movable property has to be mentioned here.

A-2 Out of earlier income or savings

If any part of the investment or expenditure is made out of earlier income or savings then it should be mentioned with the amount under this category. Suitable remarks are also required under the remarks section.

A3- Out of receipts exempt from tax

Available exemptions are listed below in the drop-down list. After choosing the relevant exemption the value of the receipt will be determined.

  • Interest income u/s 10.
  • Dividend income u/s 10(34)
  • Long-term capital gains on shares u/s 10(38).
  • Agricultural income u/s 10(1).
  • Share in the total income of firm/AOP etc. u/s 10(2A)
  • Income is not taxable in India.
  • Others

If this field is selected you will be displayed the following rows:

A4- Received from identifiable persons (with PAN)

If any amount is received from an identifiable person who holds a valid PAN, then his/her details are to be mentioned as per the following table:

The Transaction Type consists of:

  • Sales
  • Loan Received
  • Loan Repayment
  • Gift Received
  • Donation Received
  • Other Receipt.

The Transaction Mode consists of two options i.e ‘Cash’ and ‘Non-cash’. More rows can be added by clicking on the button ‘Add Row’. Suitable remarks are to be provided under the remarks section.

A5- Received from identifiable persons (without PAN)

This covers any amount is received from an identifiable person who doesn’t hold a PAN. Then his/her details are to be mentioned as per the following table:

A6- Received from un-identifiable person

If any amount is received from an unidentifiable person, then his/her details are to be mentioned as per the following table:

A7- Others

This section consists of the amounts not covered in the above-mentioned categories. Suitable remarks are to be provided under the remarks section.

A8- Unexplained amount

This section computes a figure (A1 – (A2+A3+A4+A5+A6+A7)), for which no explanation is provided.

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FAQs

Is it necessary to login to Compliance Portal? What happens if I don’t log in?

Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. The taxpayer needs to respond to the additional query request as well.

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues it will be pushed to the compliance portal for e-verification, Email and SMS will be sent to the taxpayer informing about the issue raised. Taxpayers then need to respond to those issues raised.

Compliance portal: Tax liability from Purchase of Immovable property

A taxpayer who has purchased an immovable property(from undisclosed income) might receive a query on the compliance portal. As per the Income Tax Act, any unexplained investment is considered as Income for that Financial Year u/s 69 and 69B.

Important aspects that can be considered, for the query on compliance portal regarding purchase of immovable property, are as follow:

  • If a person receives an immovable property without consideration or with disclosed consideration is lower by more than Rs. 50,000/- then the stamp valuation, the difference will be considered as an income in the hands of the purchaser.
  • If the sale has not been executed but the agreement of the sale is prepared, provisions of section 50C and 56(2) will apply.

Taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:

  1. Not filed ITR or The ITR is not filed in the given assessment year and has potential tax liability pending.
  2. Details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
  3. Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.

Taxpayers who have received any such verification issue needs to submit a response to those issues raised on the compliance portal. The response has to be submitted online by logging into the compliance portal.

Verification issue in the computation of tax liability on the Purchase of Immovable Property

Code Description Response
A1 Correct Information Value Amount + Remarks
A2 Out of earlier income or savings Amount + Remarks
A3 Out of receipts exempt from tax Exempt income-wise list
A4 Received from identifiable persons (without PAN) PAN wise list
A5 Received from identifiable persons (without PAN) Person wise list 
A6 Received from un-identifiable persons Nature of transaction wise list 
A7 Others Amount + Remarks
A8 Unexplained amount A1- (A2+A3+A4+A5+A6+A7)

A1- Correct Information value

The total of all the amount paid for the purchase of the immovable property has to be mentioned here. The purchase amount and all the expenses like stamp duty etc. In the case of co-ownership, the taxpayer should mention his/her share of investment and give details like name, PAN and share of other co-owners under the remarks section.

A-2 Out of earlier income or savings

If any part of the investment or expenditure is made out of earlier income or savings then it should be mentioned with the amount under this category. Suitable remarks are also required under the remarks section.

A3- Out of receipts exempt from tax

Available exemptions are listed below in the drop-down list. After choosing the relevant exemption the value of the receipt will be determined.

  • Interest income u/s 10.
  • Dividend income u/s 10(34)
  • Long-term capital gains on shares u/s 10(38).
  • Agricultural income u/s 10(1).
  • Share in the total income of firm/AOP etc. u/s 10(2A)
  • Income is not taxable in India.
  • Others

If this field is selected you will be displayed the following rows:

A4- Received from identifiable persons (with PAN)

If any amount is received from an identifiable person who holds a valid PAN, then his/her details are to be mentioned as per the following table:

The Transaction Type consists of:

  • Sales
  • Loan Received
  • Loan Repayment
  • Gift Received
  • Donation Received
  • Other Receipt.

The Transaction Mode consists of two options i.e ‘Cash’ and ‘Non-cash’. More rows can be added by clicking on the button ‘Add Row’. Suitable remarks are to be provided under the remarks section.

A5- Received from identifiable persons (without PAN)

If any amount is received from an identifiable person who doesn’t hold a PAN, then his/her details are to be mentioned as per the following table:

A6- Received from un-identifiable person

If any amount is received from an unidentifiable person, then his/her details are to be mentioned as per the following table:

A7- Others

If any amount which was not covered in any of the above-mentioned categories then it should be mentioned here. Suitable remarks are to be provided under the remarks section.

A8- Unexplained amount

This section computes a figure (A1 – (A2+A3+A4+A5+A6+A7)), for which no explanation is provided.

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Need to file ITR?
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FAQs

Is it necessary to login to Compliance Portal? What happens if I don’t log in?

Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. The taxpayer needs to respond to the additional query request as well.

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues it will be pushed to the compliance portal for e-verification, Email and SMS will be sent to the taxpayer informing about the issue raised. Taxpayers then need to respond to those issues raised.

Compliance portal: Tax liability on the source of Investment

The source of investment has to be declared, especially if it’s in cash. As per the Income Tax Act, any unexplained investment is considered as Income for that Financial Year u/s 69 and 69B and ITR is to be filed. Moreover, some investments are likely to make income in the future in that case, ITR is to be filed not only for investment but the income generated from the investment as well.

Taxpayers who have received any such verification issue needs to submit a response on those issues raised. Additionally, the response has to be submitted online by logging into the compliance portal.

Therefore, taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:

  1. Not filed ITR or even if the ITR is not filed in the given assessment year and has potential tax liability pending.
  2. Even if the details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
  3. Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.

Verification issue in the computation of tax liability for the source of Investment

Code Description Response
A1 Correct Information Value Amount + Remarks
A2 Out of earlier income or savings Amount + Remarks
A3 Out of receipts exempt from tax Exempt income-wise list
A4 Received from identifiable persons (without PAN) PAN wise list
A5 Received from identifiable persons (without PAN) Person wise list 
A6 Received from un-identifiable persons Nature of transaction wise list
A7 Others Amount + Remarks
A8 Unexplained amount A1- (A2+A3+A4+A5+A6+A7)
A9 Income on above transaction/investment during the year Amount + Remarks

A1- Correct Information value

You need to mention the total amount of investment here. However, in the case of co-ownership, the taxpayer should mention his/her share of investment and give details like name, PAN and share of other co-owners under the remarks section.

A-2 Out of earlier income or savings

If any part of the investment or expenditure is made out of earlier income or savings then it should be mentioned with the amount under this category. You also need to add suitable remarks under the remarks section.

A3- Out of receipts exempt from tax

The drop-down list below lists the available exemptions. After choosing the relevant exemption the value of the receipt will be determined.

  • Interest income u/s 10.
  • Dividend income u/s 10(34)
  • Long-term capital gains on shares u/s 10(38).
  • Agricultural income u/s 10(1).
  • Share in the total income of firm/AOP etc. u/s 10(2A)
  • Income is not taxable in India.
  • Others

If this field is selected you will be displayed the following rows:

A4- Received from identifiable persons (with PAN)

If any amount is received from an identifiable person who holds a valid PAN, then his/her details are to be mentioned as per the following table:

The Transaction Type consists of:

  • Sales
  • Loan Received
  • Loan Repayment
  • Gift Received
  • Donation Received
  • Other Receipt.

The Transaction Mode(source of investment) consists of two options i.e ‘Cash’ and ‘Non-cash’. More rows can be added by clicking on the button ‘Add Row’. Suitable remarks are to be provided under the remarks section.

A5- Received from identifiable persons (without PAN)

If any amount is received from an identifiable person who doesn’t hold a PAN, then his/her details are to be mentioned as per the following table:

A6- Received from un-identifiable person

If any amount(source of investment amount) is received from an unidentifiable person, then his/her details are to be mentioned as per the following table:

A7- Others

If any amount which was not covered in any of the above-mentioned categories then it should be mentioned here. Suitable remarks are to be provided under the remarks section.

A8- Unexplained amount

This section computes a figure (A1 – (A2+A3+A4+A5+A6+A7)), for which no explanation is provided.

A9- Income on above transaction/investment during the year

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Investments made and income generated from that investment of that particular financial year are to be mentioned. If the nature of the business is such that it has a lot of such frequent transactions then, in that case, working capital employed in the business and income earned on the turnover is to be mentioned.

FAQs

Is it necessary to login to Compliance Portal? What happens if I don’t log in?

Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.

What is an additional query request?

Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. The taxpayer needs to respond to the additional query request as well.

How will the taxpayer come to know about pending e-verification?

If there are any e-Verification issues it will be pushed to the compliance portal for e-verification, Email and SMS will be sent to the taxpayer informing about the issue raised. Taxpayers then need to respond to those issues raised.