Prefilling of Capital Gains, Dividends and Interest Income in your ITR
The Income Tax Department has been coming up with various measures to ease the process of filing the income tax returns and at the same time to collect the information of the income generated from the source of the income itself. Employers report salaries of employees, Bankers report Interest on Fixed Deposits, Customers report our revenue and corresponding tax amount on all these incomes are also deducted and deposited in advance with the government. All these details reflect in our Form 26AS and thus the assessee cannot miss out or escape from declaring the income and payment of due taxes on the same.
And now, to cover more such transactions, CBDT has notified the reporting of Income by way of Capital Gains, Dividends and interest income.
We generally see assessee not reporting the savings interest income, dividend (Which was exempt till Financials year 2019-20, but now is taxable in the hands of recipient at the applicable tax rates) in their income tax return.
CBDT vide Notification No. 16/2021 dated 12th March 2021 has notified the reporting of the details of income generated by Capital gains of transfer of Listed securities and units of mutual funds, dividend and interest income.
The specified persons as per the above table have to report all the notified transactions by filing SFT -Statement of Financial Transactions by filing Form 61A. With all the above information being reported to the Income tax department, now assesses can not miss out on declaring these incomes.
From the point of view of the department, this is a good step to ensure that the above incomes are not missed out from being reported. However we should also look at the practicability of the reporting and the difficulty that the assesses and the reporting persons may face. The reporting being introduced for the first time with respect to these transactions, there could be chances of some misreporting (for instance wrong amounts, or incorrect transactions). Based on such data, the department may issue inaccurate intimations to assessee causing hardships. However, with the current age of digitized world, the chances of these kind of errors would be very minimal.
Nevertheless, we should not put away the advantage of the same. Assessee need not worry about reporting these specified incomes. We just have to verify the reported data with our records and just submit our Return of income.
In the initial one or two years, there maybe some reporting discrepancies, however in the long run this would be a great move from the department
Disclaimer:“Information contained herein is for informational purposes only and should not be used in deciding any particular case. The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Though utmost efforts have been made to provide authentic information, it is suggested that to have better understanding and obtaining professional advice after thorough examination of particular situation.”