Received advance tax notice with inflated demand? It’s an error. Here’s what to do

livemint.com:

“Income Tax Department has received information about certain significant financial transactions relating to FY 2023-24 (AY 2024-25). Please view transactions under e-Campaign tab on Compliance Portal and remember to pay appropriate Advance Tax." If you have received such a message from the Income Tax department with an inflated tax demand, know that it is an error due to inaccurate reporting of certain financial transactions in the annual information statement (AIS). Chartered accountants told Mint that some taxpayers have received advance-tax notice in which certain reporting entities have reported faulty transactions.

“Most of this inaccurate information has been reported by entities in the securities market. Taxpayers who deal in shares may have received it," said Nitesh Buddhadev, founder, Nimit Consultancy. The IT department has also acknowledged the error.

“Based on feedback from taxpayers on the e-campaign for advance tax, the department has identified certain inconsistencies in the data of the securities market (SFT-17) provided by one of the reporting entities. The reporting entity has been asked to submit a revised statement based on updated information. Hence, the data on AIS will be updated.

Taxpayers are advised to wait for further updates on AIS based on the revised statement," the IT department posted on X. Since the due date to pay advance tax, 15 March, is only four days away, taxpayers should carefully calculate the advance tax liability on the basis of their actual transactions during the financial year and not the AIS. “Taxpayers should not rush to pay the demanded tax.