Understanding the e-Campaign Initiative by the Income Tax Department and the Procedure for Filing a Response on the Compliance Portal

The Income Tax Department has initiated the e-Campaign, utilizing data analytics for enhanced tax administration. Through this initiative, the department gathers data from various sources including government agencies, banks, financial institutions, registrars, etc. Over time, a significant number of individuals have engaged in large amount transactions, yet there hasn't been a proportional increase in income tax filings. Many individuals have been found to file their returns without reporting these substantial transactions, resulting in a rise in cases of underreported income. The e-Campaign is launched to tackle these issues.

The e-Campaigns can be related to:

• Non-Filing of Return
• Certain significant/high-value transactions done by the taxpayer

Following are the different functionalities available under e-Campaign:

1. Significant Transaction e-Campaign:
• Income Tax Department shows taxpayers transactions that don't match their profile based on preset rules.
• Aimed at getting feedback from taxpayers about these transactions.
2. Non-filing of Return e-Campaign:
• Targets taxpayers who haven't filed income tax returns for a specific assessment year.
• Displays transactions indicating potential tax liability or those obligated to file returns for feedback.
3. High Value Transactions e-Campaign:
• Highlights taxpayer transactions reported by third party information sources that do not align with their Income Tax Return for a specified Financial Year.
• Encourages taxpayers to provide feedback on these transactions.

What are Significant Transactions/High Value Transactions?

The Income Tax Department has not specifically defined Transactions/High Value Transactions, however, in order to monitor the Significant Transactions/High Value Transactions, the Income Tax Department has specified certain entities which are called as Reporting entities. The Income Tax Department has mandated the reporting entities to report the specified transactions under the provisions of Statement of Financial Transactions (SFT) and Reportable Account. Reporting entities include government agencies, Banks, financial institutions, registrars, etc. Reporting entities are mandated to register, record and maintain certain specified transactions. The taxpayer can also keep track of such transactions through Form 26AS and Annual Information Statement (AIS).

Following are the transactions which are required to be reported by Reporting entities to the Income Tax Department and hence may be considered by department for sending the communications under e-Campaign for Significant Transactions or e-Campaign for High Value Transactions: -

Communications from Income Tax Department

The Income Tax Department sends communications under e-Campaigns via following ways: -

• Electronic mail (E-Mail)

• Short text message (SMS)

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In these communications, the taxpayers are directed to visit Compliance Portal and submit response against identified issues.

Note: 1) The taxpayer should verify and update their email address and mobile number on the e-filing portal of the income tax department to receive electronic communications.

          2) The taxpayer should include e-mails and SMS from Income Tax Department in ‘safe list’ or ‘white list’ to prevent such communications from being blocked or rejected or sent to Spam folder.

When will a person receive communication under e-Campaign?

A person will receive communication under e-Campaign functionalities for following possible reasons: -

1. Significant Transaction e-Campaign:
• These communications are received when a person is a party in a transactions listed above and generally before the end of Financial Year.
• These communications generally sent as a reminder recommending the person to pay advance tax after considering the transactions reported to the Income Tax Department. Further it states that, the person should view and give appropriate feedback with regard to such transactions on Compliance Portal.
2. Non-filing of Return e-Campaign:
• These communications are received when a person is a party in a transactions listed above and has not filed his Tax Return till the deadline of filing Tax Return.
• These communications generally recommend the person to file the Tax Return after considering the transactions reported to the Income Tax Department. Further it states that, the person should view and give appropriate feedback with regard to such transactions on Compliance Portal.
3. High Value Transactions e-Campaign:
• These communications are received when a person is a party in a transactions listed above and generally after the end of Financial Year.
• These communications generally recommend the person to check whether significant and high value transactions are considered in the Tax Return filed by him. Further it states that, the person should view and give appropriate feedback with regard to such transactions on Compliance Portal.

How to submit repose to the communications received under e-Campaign on Compliance Portal?

1.   Log in on Compliance Portal of the Income Tax Department:

• All the information received by Income Tax Department under e-Campaign is displayed on Compliance Portal. One can access the Compliance Portal by following the steps stated under-
• Log in to e-filing portal of Income Tax Department .
• Click on “Pending Actions” button in the Ribbon and select “Compliance Portal” from the options populated.

• After clicking on Compliance Portal option, one Pop-up will appear stating that you will be leaving e-filling portal and redirected to the Compliance Portal.

• After you click on Proceed, the taxpayer will be redirected to the compliance portal in his log-in directly.

2. Access the e-Campaign Tab on Compliance Portal.

• The taxpayer can click on “e-Campaign” button on the ribbon to access the e-Campaign on the Compliance portal.

• If you have any pending communications under e-Campaign, then those will be shown under “e-Campaign List” on the e-Campaign page. The type of e-Campaign represents the functionality of the e-Campaign (i.e. Significant Transaction, Non-filing of Return and High-value Transaction).

3. Response to the communications received under e-Campaign:  

• In order to give response to the communication under e-Campaign, the person should click on the expand button given for the pending e-Campaign in the e-Campaign List.

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• Then the “Feedback on Information on AIS” option will be given to the person for giving the response to communication received under e-Campaign.

• After you click on “Provide Feedback in AIS” button, then you will be redirected to the AIS of the respective Financial Year.

4.    Transactions requiring feedback in AIS: -

• In the AIS page, the details of all transactions, in respect of the person, reported to the Income Tax Department are shown in Part B.
• There are 5 main sub parts of Part B under which the said information is classified. Those are-

              o   TDS/TCS Information

              o   SFT Information

              o   Payment of Taxes

              o   Demand and Refund

              o   Other Information

• One should check all the transactions in Part B and provide appropriate feedback wherever it is necessary.
• However, there are some specific transactions which, as per the data analysis of the Income Tax Department, are unusual and hence feedback for the same is expected from the person.
  
• The transaction for which feedback is expected are marked by the Income Tax Department by providing “e” sign in front of such transaction in the AIS page.

5.    Providing Feedback in AIS

• In order to provide feedback a specific transaction, the person is required to click on the expand button provided in front of such transaction.
• On expanding the details of the transaction, all the information available on Compliance Portal regarding such transaction will be shown in a tabular format.
• All transactions with “Active” status will have feedback option enabled. The transactions for which feedback is expected will be shown with “Expected” button and others will be shown with “Optional” button in the “Feedback” column.

• Once you click on “Expected” or “Optional” button in the “Feedback” column, the “Add Feedback” page will open.
• The “Add Feedback” page shows all the details available with the Income Tax Department regarding the transaction. Such details include - Information Category, Information Source, Date of reporting, Transaction date, Transaction Amount and other information relating to that transaction.

• At the bottom of the page, “Feedback Type” dropdown is given which has following options:

            o   Information is correct

            o   Source is receipt of gift which is not taxable

            o   Information is not fully correct

            o   Information relates to other PAN / Year

            o   Information is duplicate / included in other information

            o   Information is denied

         Other options are also available which are applicable to specific transactions only.

         For example: in case the transaction reported is “Sale of land or building” then the dropdown will also include option of “Sale of Rural Agricultural Land”.

• Some specified feedback type require the person to provide further information in the feedback.

          For example: If one selects option of “Information relates to other PAN / Year” from the dropdown, then he is required to provide the PAN / Year to which such information relates.

The procedure for submitting the response to the communications received under e-Campaign is same for all three functionalities under e-Campaign. The only difference is while submitting the said response, one should remember following: -

1.   Significant Transaction e-Campaign - The person is supposed to provide feedback explaining that he has paid the required advance tax after considering such transaction or why he is not required to pay such advance tax even if such transaction is reported in his AIS.

2.   Non-filing of Return e-Campaign - The person is supposed to provide feedback explaining that why he is not required to file Tax Return even if such transaction is reported in his AIS.

3.   High Value Transactions e-Campaign - The person is supposed to provide feedback explaining that he has filed his Tax Return after considering such transaction or he is not required to include such transaction in his Tax Return even if such transaction is reported in his AIS.

Conclusion

The e-Campaign is launched by the Income Tax Department with a view of making people more responsible about the tax compliances and ensuring that all the Tax Returns filed by people are complete and do not miss significant and high value transactions.

Further, people should not fear if they receive any communications under e-Campaign. They are just required to file simple feedback in respect of transactions reported by various entities to the Income Tax Department. The procedure for submitting the response to such communication is also explained with detailed explanations and screenshots in this blogpost to make the procedure understandable to layman taxpayers.

If you have any queries or need assistance for submitting your response to communications received under e-Campaign, then we at “TaxArithm” are always available for providing hassle-free resolution to your tax matters.