ITR filing: Assessees must carefully match GST, IT data

With all the income tax returns (ITR) forms for AY26 notied and ling to start soon, the assessees need to be mindful of reconciliation in information under GST and income tax, experts said. They cautioned that any discrepancy would result in queries and higher compliance cost.

An ordinary GST assessee needs to le monthly returns (GSTR 1, 2B and 3B) and then annual return (GSTR 9 and 9C). While these forms record business transaction, ITR forms record earnings. Based on a revised MoU signed between the Central Board of Direct Taxes (CBDT) and Central Board of Indirect Taxes & Customs (CBIC) on July 21, 2020, data and information are being shared on an automatic and regular basis. Also, the two boards, on request and spontaneous basis, share any information available in their respective databases, which may have utility for the other organisation. Such an arrangement emphasises the need for more attention by an assessee.

DATA FLOW

According to Neha Shrivastava, Associate Partner with Forvis Mazars in India, GST’s design assumes that every outward and inward supply entered in a business’ book will exactly replicate across a chain of returns (GSTR1 2B 3B 9/9C) and databases (einvoice IRP, Ewaybill, 26AS. Any break in that digital era triggers automated red ags. “A midsize distributor can process 100150 B2B invoices a month; each one must be matched at least twice before credit can be taken,” she said. Further, While GST returns sit on the GSTN, 26AS is generated from IT records of TDS/TCS.

“A sale, for instance, results in 2 per cent TDS — visible to the taxman even if the invoice never reached GSTR1. Matching the two statements becomes mandatory to safeguard TDS/ TCS credits ensure crossplatform consistency as AIS (Annual Information Statement) expands to include more GSTlinked data,” Shrivastava said.

COMPLIANCE COSTS

Some experts acknowledge that while reporting and reconciling GST turnover with IT tax lings have been part of ITR forms for the past few years, technology has changed data capturing and data analytics which, in turn, result in effective compliance. But that could also add to cost. According to Vishwas Panjiar, Partner at Nangia Andersen LLP, small businesses could face higher compliance costs simply to explain genuine differences which may otherwise have arisen due to technical issues and may not necessarily be signs of tax evasion.

Source : https://www.pressreader.com/india/businessline-kolkata-9WVY/20250526/281655375995107