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Technical Glitches in Income Tax Return Filing Portal: Comprehensive Details

Technical Glitches in Income Tax Return Filing Portal: Comprehensive Details

Taxpayers filing their Income Tax Returns (ITR) have reported specific technical glitches affecting accuracy and ease of compliance. The following detailed issues have been identified:

1. Advance Tax Calculation Errors for Presumptive Income (Sections 44AD, 44ADA, and 44AE)

  • Under presumptive taxation schemes (Sections 44AD, 44ADA, and 44AE), taxpayers are mandated to pay advance tax only once, with the due date being on or before 15th March of the financial year.
  • However, the current Income Tax filing portal incorrectly calculates interest under sections 234B and 234C by incorrectly assuming applicability of all four installments (15th June, 15th September, 15th December, and 15th March).
  • This leads to incorrect demands for interest from taxpayers opting for presumptive taxation.
  • Recommendation:
    • Manually verify your tax computations to ensure only one installment is considered.
    • File a grievance or rectification request immediately on encountering any incorrect interest demands.

2. Incorrect Availability of Amount for Rebate Under Section 87A

  • A glitch has been identified where the rebate under section 87A is inaccurately denied in cases involving short-term capital gains.
  • As per the Income Tax Act, rebate under section 87A should be applied on the total tax liability, excluding taxes payable on specific capital gains under sections112A.
  • This incorrect calculation potentially increases the tax payable by eligible taxpayers.
  • Recommendation:
    • Perform manual verification to ensure rebate eligibility is accurately determined.
    • Submit rectification requests promptly in case of incorrect denial.

3. Inability to Carry Forward Long-Term Capital Gain (LTCG) Losses

  • Users have reported difficulties in correctly carrying forward LTCG losses, as the portal restricts or fails to reflect the carry-forward amount accurately.
  • This affects the taxpayers’ ability to offset these losses against future gains, potentially resulting in higher future tax liabilities.
  • Recommendation:
    • Keep detailed manual records of LTCG losses for future reference.
    • Immediately report this issue through the grievance redressal mechanism of the Income Tax portal.

4. Inaccuracies in Carry Forward of Losses (CFL), Particularly Capital Losses

  • There are notable inaccuracies and inconsistencies in carrying forward capital losses. The portal inaccurately represents the quantum of losses, affecting taxpayers’ future adjustments.
  • This technical glitch may lead to incorrect future tax liabilities or adjustment issues.
  • Recommendation:
    • Continuously cross-verify CFL details with past filings.
    • Maintain thorough manual records of all capital losses.
    • Promptly address discrepancies through the official grievance mechanism or rectification requests.

Recommended Action Steps for Taxpayers:

  • Maintain comprehensive manual records for backup.
  • Consistently cross-check calculations with Form 26AS and previous ITR filings.
  • Immediately file rectification requests upon identifying discrepancies.
  • Utilize the Income Tax Department’s grievance mechanism actively for timely resolution.

These technical glitches are expected to be rectified by the Income Tax Department soon. Until then, careful manual verification and proactive reporting will ensure compliance and minimize inconvenience.

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