High Value transaction SMS from IT deptt .
This query is : Resolved
03 January 2024
I have received SMS/EMAIL that
High Value transaction which does not appear to be in line with IT return .
During year as per AIS interest from post office is 5 lakh where as per IT return it is 2 lakh.
Reason of variation is I have accounted interest on acrrual basis.
Now I have to give feedback in AIS.
Which option to be selected .
Option A ,B ,C,D ?
Please advise
I have received SMS/EMAIL that
High Value transaction which does not appear to be in line with IT return .
During year as per AIS interest from post office is 5 lakh where as per IT return it is 2 lakh.
Reason of variation is I have accounted interest on acrrual basis.
Now I have to give feedback in AIS.
Which option to be selected .
Option A ,B ,C,D ?
Please advise
14 January 2024
Can you also share the Option Descriptions, please?
28 July 2024
When you receive a notification about a high-value transaction from the Income Tax Department, and there is a discrepancy between the transaction reported in the Annual Information Statement (AIS) and your Income Tax Return (ITR), it's important to address it accurately.
Given your situation, where there is a discrepancy due to different accounting treatments (accrual basis vs. actual basis), you need to select the appropriate option when providing feedback. Here’s a step-by-step guide on how to handle this:
### **Understanding the Options**
Typically, the options provided for feedback in AIS are:
1. **Option A: The transaction is correct as per records.**
2. **Option B: The transaction is not correct.**
3. **Option C: The transaction is not related to the taxpayer.**
4. **Option D: Additional information provided.**
### **Choosing the Right Option**
Given your case:
- **Interest from the post office is reported as ₹5 lakh in AIS**, but you have only shown ₹2 lakh in your ITR due to accounting on an accrual basis.
Here’s what each option might imply:
1. **Option A (The transaction is correct as per records)**:
- This option suggests that you believe the reported amount in AIS is correct, which is not the case here since you are using a different accounting method.
2. **Option B (The transaction is not correct)**:
- This implies that the reported transaction in AIS is incorrect. Since you accounted for interest on an accrual basis and reported less in your ITR, this option may not fully address the reason for the discrepancy.
3. **Option C (The transaction is not related to the taxpayer)**:
- This would be applicable if the transaction did not pertain to you at all, which is not the case here as the interest income does pertain to you but is accounted differently.
4. **Option D (Additional information provided)**:
- This option allows you to provide a detailed explanation for the discrepancy. Given that the reason for the discrepancy is that you are accounting for interest on an accrual basis, and this explanation needs to be provided to clarify why the amount reported in your ITR is different from the AIS.
### **Recommended Action**
**Select Option D: Additional information provided.**
In the feedback, provide a detailed explanation of the situation:
1. **Explain the Discrepancy**: State that the interest income is accounted for on an accrual basis in your ITR, which is different from the basis on which it is reported in the AIS.
2. **Clarify Accounting Method**: Mention that the total interest earned was ₹5 lakh, but you have recognized ₹2 lakh in the current year based on your accounting principles.
3. **Support with Documentation**: If possible, attach or reference any documentation that supports your accounting treatment (e.g., bank statements, post office account statements showing interest accruals).
### **Example of Feedback**
"Dear Sir/Madam,
The discrepancy between the AIS and my Income Tax Return arises due to the accounting method used. I account for interest on an accrual basis, and hence the interest income reported in my ITR is ₹2 lakh for the year. However, the AIS reflects a total interest of ₹5 lakh, which includes interest accrued but not yet recognized in this year's return.
I have adhered to the accrual accounting method as per accounting standards. Please find attached [relevant documents/statement] for your reference.
Thank you."
### **Next Steps**
- **Submit the Feedback**: Provide the explanation through the feedback mechanism on the AIS portal.
- **Monitor Status**: Keep an eye on any responses or further communications from the Income Tax Department.
By selecting the correct option and providing a clear explanation, you can resolve the discrepancy effectively and ensure that your tax records are accurate.
Given your situation, where there is a discrepancy due to different accounting treatments (accrual basis vs. actual basis), you need to select the appropriate option when providing feedback. Here’s a step-by-step guide on how to handle this:
### **Understanding the Options**
Typically, the options provided for feedback in AIS are:
1. **Option A: The transaction is correct as per records.**
2. **Option B: The transaction is not correct.**
3. **Option C: The transaction is not related to the taxpayer.**
4. **Option D: Additional information provided.**
### **Choosing the Right Option**
Given your case:
- **Interest from the post office is reported as ₹5 lakh in AIS**, but you have only shown ₹2 lakh in your ITR due to accounting on an accrual basis.
Here’s what each option might imply:
1. **Option A (The transaction is correct as per records)**:
- This option suggests that you believe the reported amount in AIS is correct, which is not the case here since you are using a different accounting method.
2. **Option B (The transaction is not correct)**:
- This implies that the reported transaction in AIS is incorrect. Since you accounted for interest on an accrual basis and reported less in your ITR, this option may not fully address the reason for the discrepancy.
3. **Option C (The transaction is not related to the taxpayer)**:
- This would be applicable if the transaction did not pertain to you at all, which is not the case here as the interest income does pertain to you but is accounted differently.
4. **Option D (Additional information provided)**:
- This option allows you to provide a detailed explanation for the discrepancy. Given that the reason for the discrepancy is that you are accounting for interest on an accrual basis, and this explanation needs to be provided to clarify why the amount reported in your ITR is different from the AIS.
### **Recommended Action**
**Select Option D: Additional information provided.**
In the feedback, provide a detailed explanation of the situation:
1. **Explain the Discrepancy**: State that the interest income is accounted for on an accrual basis in your ITR, which is different from the basis on which it is reported in the AIS.
2. **Clarify Accounting Method**: Mention that the total interest earned was ₹5 lakh, but you have recognized ₹2 lakh in the current year based on your accounting principles.
3. **Support with Documentation**: If possible, attach or reference any documentation that supports your accounting treatment (e.g., bank statements, post office account statements showing interest accruals).
### **Example of Feedback**
"Dear Sir/Madam,
The discrepancy between the AIS and my Income Tax Return arises due to the accounting method used. I account for interest on an accrual basis, and hence the interest income reported in my ITR is ₹2 lakh for the year. However, the AIS reflects a total interest of ₹5 lakh, which includes interest accrued but not yet recognized in this year's return.
I have adhered to the accrual accounting method as per accounting standards. Please find attached [relevant documents/statement] for your reference.
Thank you."
### **Next Steps**
- **Submit the Feedback**: Provide the explanation through the feedback mechanism on the AIS portal.
- **Monitor Status**: Keep an eye on any responses or further communications from the Income Tax Department.
By selecting the correct option and providing a clear explanation, you can resolve the discrepancy effectively and ensure that your tax records are accurate.
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