Daijiworld Media Network – New Delhi
New Delhi, Jul 27: With the July 31 deadline for filing Income Tax Returns (ITRs) approaching, tax experts have identified data mismatches across financial records and recent changes in residential property taxation as the biggest challenges for taxpayers this filing season.
Experts cautioned taxpayers against relying solely on the pre-filled information available on the Income Tax Department's e-filing portal, saying discrepancies between various financial records have become a major reason for scrutiny notices.
Rahul Charkha, Partner at Economic Laws Practice, said taxpayers should ensure that the information submitted in their returns matches the data already available with the Income Tax Department. He noted that inconsistencies between the Annual Information Statement (AIS), Form 26AS, Form 16, bank records, broker statements and personal records are among the most common triggers for tax queries. He also advised taxpayers to carefully select the appropriate ITR form.
Tax professionals said filing has become more complex for individuals earning income from multiple sources, including capital gains, foreign assets, employee stock ownership plans (ESOPs), cryptocurrencies and overseas income, as these require additional disclosures.
Another major area of concern this year is the revised taxation of residential property sales introduced in the Union Budget.
According to Gaurav Makhijani, Managing Partner at Makhijani Gera & Associates LLP, taxpayers selling residential properties purchased before July 23, 2024, can choose between the earlier 20 per cent long-term capital gains (LTCG) tax with indexation and the new 12.5 per cent LTCG tax without indexation. He said some taxpayers have reported incorrect calculations of surcharge or interest in the return filing utility, making manual verification necessary before submitting returns.
Experts also noted some confusion due to the coexistence of the newly enacted Income Tax Act, 2025, and return forms that continue to follow the framework of the Income-tax Act, 1961. However, they clarified that this does not pose any practical difficulty as the filing utilities remain aligned with the current assessment year.
On the technology front, tax experts said the Income Tax Department's e-filing portal has remained largely stable despite minor glitches following recent system upgrades. Some users, however, have reported temporary issues related to registration of new entities and certain portal functions.
Replying to a question in Parliament, Minister of State for Finance Pankaj Chaudhary said taxpayers may experience occasional delays during peak filing periods because of heavy traffic but maintained that the portal has been operating in a "largely stable and efficient manner" and is being continuously monitored.
The government has also said that the new Income Tax Act, 2025, along with the upgraded e-filing portal, has streamlined the return filing process. Finance Minister Nirmala Sitharaman recently said the modernised tax framework is capable of handling more than 3.2 crore ITRs and millions of daily interactions during peak filing periods, while enabling faster refunds and greater certainty for honest taxpayers.