Hotness Discrepancy of Information on ITD Compliance Po...

Hot Deal Discrepancy of Information on ITD Compliance Portal

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Have only one account with Zerodha . Got SMS from ITD to file for 2018-19 FY and here are the details. Never filed ITD before as my income is less than 2.5L. I can file ITD but please do let me know how to correct the data mismatch on compliance website first. as I can see no option to upload zerodha tax P&L on that website.

According to compliance website my total

*Income on Securities Delivery Based is * 76,59,049 – actually it’s turnover value

Purchase of Securities Delivery Based is : 70,52,089 – same as above

Did not included the intraday txn showing on compliance portal as those figures are O.K. but delivery txn figures are totally wrong.

According to Zerodha tax P&L my realized profit for Short term is : – 7907 and Intraday Profit is ++12307 which comes to net Rs. 4400.

According to zerodha Tax P & L total buy transaction value of delivery based stock is Rs. 3752557 and total sell delivery based txn value is 3669272 – turnover value

As you can see there’s a huge difference between zerodha tax P&L and data on compliance website – why they are showing turnover as Income / Purchase ???

The amount shown on the compliance website are abnormally high and I can see some duplicate entries as well.

Compared to zerodha tax P&L and ITD compliance website

For eg .

For Vinati organics on Tax P&L of Zerodha Buy Value is Rs. 153829 and Sell value is Rs. 172278 for 100 Quantity.

On Compliance website I can see

Income on Securities Delivery Based Section : CDSL Receipts from sale/transfer of securities (Off-market transaction)

Scrip Name/Code: VINATI ORGANICS LIMITED-NEW EQUITY SHARES OF RE 2/- AFTER SPLIT
Quantity: 100.00 Rs. 1,64,800

NSE Receipts from sale of securities (Delivery based transactions on Exchange)
Scrip Name/Code: VINATIORGA Quantity: 100.00 Rs. 1,72,278

Two entries for sale txn with different amounts while The NSE entry matches with zerodha tax P&L.

Purchase of Securities Delivery Based Section

CDSL Purchase/transfer of securities (Off-market transaction)

Scrip Name/Code: VINATI ORGANICS LIMITED-NEW EQUITY SHARES OF RE 2/- AFTER SPLIT
Quantity: 200.00 Rs. 3,26,395

NSE Purchase of securities (Delivery based) on Exchange
Scrip Name/Code: VINATIORGA
Quantity: 200.00 Rs. 3,20,120

For Bombay Dying According to Zerodha It’s Buy Value 64925 and Sell Value 74192 Quantity : 590

Income on Securities Delivery Based : CDSL Receipts from sale/transfer of securities (Off-market transaction)

Scrip Name/Code: THE BOMBAY DYEING AND MANUFACTURING CO LTD # NEW EQUITY SHARES OF RS 2/- AFTER SUB DIVISION
Quantity: 590.00 Rs. 79,886

Purchase of Securities Delivery Based : CDSL Purchase/transfer of securities (Off-market transaction)

Scrip Name/Code: THE BOMBAY DYEING AND MANUFACTURING CO LTD # NEW EQUITY SHARES OF RS 2/- AFTER SUB DIVISION
Quantity: 590.00 Rs. 65,538

TSN Id : 1119017371217 BSE Purchase of securities (Delivery based) on Exchange
Scrip Name/Code: BOMBAY DYEI

Quantity: 5.00 Rs. 54,685 !!!

On the last example of Bombay Dyeing please note the Share quantity and Price !!!

What is the off market transaction I’ve no idea about and Never ever I bought 200 shares of Vinati. The whole Purchase of Securities and Income on Securities section is filled with such duplicate and wrong entries.

The whole Information Summary is based on such wrong information hence the inflated value. Please do read the discrepancies in Bombay dyeing again if you missed my point.

Now what shall i do to correct these. Do let me know if you need any further information.

68 Comments  |  
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Missing
Critic
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My guess is that IT dept considers the total amount of shares bought & sold as a part of their income calculation(if you add total bought & sold shares you will get a figure very close to 76 lakh figure quoted by IT dept). Also how come you are doing 72 lakh of total transactions(buy+sell) & yet chose not to file ITR. Not filing ITR is supposed to be for those who genuinely don’t need it(aka low income people who don’t even know what stocks are). You should have filed ITR even if shown income was below 2.5 lakh. Also how do you explain the source of funds to make all these transactions. You either used your savings(in which case again you should have filed IT returns showing even 2 lakh income for 2-3 years to support it) or you are using your family’s money(& again you should have shown this in ITR as any money received from direct relatives like father,mother,brother,sister etc is 100% tax free provided the person giving the money has already shown it in their ITR) received in previous years.

Now nothing can be done.Collect all documents related to transactions & your income & start preparing your case. If you can afford it then hire a professional CA/tax consultant.

Missing
Tech Guru
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guest_999 wrote:

My guess is that IT dept considers the total amount of shares bought & sold as a part of their income calculation(if you add total bought & sold shares you will get a figure very close to 76 lakh figure quoted by IT dept). Also how come you are doing 72 lakh of total transactions(buy+sell) & yet chose not to file ITR. Not filing ITR is supposed to be for those who genuinely don’t need it(aka low income people who don’t even know what stocks are). You should have filed ITR even if shown income was below 2.5 lakh. Also how do you explain the source of funds to make all these transactions. You either used your savings(in which case again you should have filed IT returns showing even 2 lakh income for 2-3 years to support it) or you are using your family’s money(& again you should have shown this in ITR as any money received from direct relatives like father,mother,brother,sister etc is 100% tax free provided the person giving the money has already shown it in their ITR) received in previous years.

Now nothing can be done.Collect all documents related to transactions & your income & start preparing your case. If you can afford it then hire a professional CA/tax consultant.

As Per IT portal ( Delivery based trades only ) ( Non delivery ie intraday turnovers are ok with one exception here also value in zerodha is buy tunover 3608769 and sell turnover is 3621077 )

Income on Securities Delivery Based Section ( Here All of the Sale Transactions Listed ) :
76,59,049 -

It’s 3744655 according to zerodha Tax P&L – It’s total buy side turnover value of all the trades I’ve done on FY18-19

Purchase of Securities ( Here all Buy txns listed ) : 70,52,089

It’s 3752563 according to zerodha Tax P&L – It’s total sale turnover value of all the trades I’ve done on FY18-19

Now Buy and Sale side both Has lots of duplicate entries like you can see some offmarket entries on Compliance website and some entries like 200 shares of vinati @ 3,20,120 which even zerodha has no record of. Also Can you believe 5 shares of Bombay dyeing is showing as 54,685 ???

Lastly say you started trading as short termer with 2L capital and did some 20 trades so the total turnover comes to Rs. 40L on buy side. Another 40L for sell side. so for total 40 txns total turnover comes to 80L, Right ?

Anyway, my question why compliance portal is showing all the sell side txns as income and the buy side txns as purchase – with their logic total turnover comes as 1.47Cr. It’s total buy sell value of the all the trades done so far ?

Image for better understanding

https://cdn0.desidime.com/attachments/photos/607863/medium/6552076attach1.png?1583999944

Again just to be clear According to Zerodha tax P&L my realized profit for Short term is : – 7907 and Intraday Profit is ++12307 which comes to net Rs. 4400 for FY18-19

Missing
Critic
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No doubt there are discrepancies in IT dept portal entries but that does not lessen the fact that you did make transactions worth lakhs without filing even ITR which is the main point here.Once your case is up for hearing no doubt all these incorrect entries will be found out & removed but you will still have to file a proper ITR with all the details & may also have to pay a penalty of ~5k in worst case scenario. As for your example if a short term trader starts with a capital of 2 lakh & make 20 trades then if he had never filed an ITR then he too will most likely get a notice similar to yours. In short,file your ITR every year even if you only show 1 lakh income(actual & not imaginary figure as you must be having some income if you are playing in stock market with lakhs).

Missing
Deal Cadet
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topgear wrote:

Tagging @GoogleCA @ramadesidime

Since it is Loooong post, difficult to digest.

In simple one line, my understanding is , there are wrong entries and data mismatch in compliance website.

Am I right? If yes, how it is effecting you since you are making loss.
I know about calculation of turnover amount issues with stocks and futures, it is grey area.
Utilize it to tweak it while filing IT returns. (If you had filed the IT return in time, you would not have received that info sms), Any how file it now.

PS: Companies make errors while processing the data due to sub-standard computer programmers who do not validate the script before putting into production.

Missing
Tech Guru
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topgear wrote:

As Per IT portal ( Delivery based trades only ) ( Non delivery ie intraday turnovers are ok with one exception here also value in zerodha is buy tunover 3608769 and sell turnover is 3621077 )

Income on Securities Delivery Based Section ( Here All of the Sale Transactions Listed ) :
76,59,049 -

It’s 3744655 according to zerodha Tax P&L – It’s total buy side turnover value of all the trades I’ve done on FY18-19

Purchase of Securities ( Here all Buy txns listed ) : 70,52,089

It’s 3752563 according to zerodha Tax P&L – It’s total sale turnover value of all the trades I’ve done on FY18-19

Now Buy and Sale side both Has lots of duplicate entries like you can see some offmarket entries on Compliance website and some entries like 200 shares of vinati @ 3,20,120 which even zerodha has no record of. Also Can you believe 5 shares of Bombay dyeing is showing as 54,685 ???

Lastly say you started trading as short termer with 2L capital and did some 20 trades so the total turnover comes to Rs. 40L on buy side. Another 40L for sell side. so for total 40 txns total turnover comes to 80L, Right ?

Anyway, my question why compliance portal is showing all the sell side txns as income and the buy side txns as purchase – with their logic total turnover comes as 1.47Cr. It’s total buy sell value of the all the trades done so far ?

Image for better understanding

https://cdn0.desidime.com/attachments/photos/607863/medium/6552076attach1.png?1583999944

Again just to be clear According to Zerodha tax P&L my realized profit for Short term is : – 7907 and Intraday Profit is ++12307 which comes to net Rs. 4400 for FY18-19

They have also done same for me as they are showing all liquid mutual fund purchase transactions as purchase and all redemptions as income I repeated the process of buying and selling liquid funds many times in a month
All redemptions are showing as income in crores while actual income is hardly 2-3 thousand rupees only

Missing
Tech Guru
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drupal wrote:

They have also done same for me as they are showing all liquid mutual fund purchase transactions as purchase and all redemptions as income I repeated the process of buying and selling liquid funds many times in a month
All redemptions are showing as income in crores while actual income is hardly 2-3 thousand rupees only

Thank you mate for the update. So what shall be our next step ?

Missing
Tech Guru
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topgear wrote:

Thank you mate for the update. So what shall be our next step ?

I am still thinking what to do what should be reply
we can mark information as incorrect and then may be they ask for proofs hence need some experts advice here in DD people mostly taunt and ridiclue and create more problems

Missing
Tech Guru
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1523
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ramadesidime wrote:

Since it is Loooong post, difficult to digest.

In simple one line, my understanding is , there are wrong entries and data mismatch in compliance website.

Am I right? If yes, how it is effecting you since you are making loss.
I know about calculation of turnover amount issues with stocks and futures, it is grey area.
Utilize it to tweak it while filing IT returns. (If you had filed the IT return in time, you would not have received that info sms), Any how file it now.

PS: Companies make errors while processing the data due to sub-standard computer programmers who do not validate the script before putting into production.

please sir do read the second post of mine on this thread.

Missing
Tech Guru
181
1973
104
Expand
ramadesidime wrote:

Since it is Loooong post, difficult to digest.

In simple one line, my understanding is , there are wrong entries and data mismatch in compliance website.

Am I right? If yes, how it is effecting you since you are making loss.
I know about calculation of turnover amount issues with stocks and futures, it is grey area.
Utilize it to tweak it while filing IT returns. (If you had filed the IT return in time, you would not have received that info sms), Any how file it now.

PS: Companies make errors while processing the data due to sub-standard computer programmers who do not validate the script before putting into production.

Thanks bro you are such helpful and knowledgeable person in conclusion we should file return first

Missing
Critic
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drupal wrote:

They have also done same for me as they are showing all liquid mutual fund purchase transactions as purchase and all redemptions as income I repeated the process of buying and selling liquid funds many times in a month
All redemptions are showing as income in crores while actual income is hardly 2-3 thousand rupees only

That is why you have to file ITR every year & show your actual income even if it is below taxable limit .It can be even above taxable limit if shown as money received from parents provided they have shown it in their ITR as this income is 100% tax free with no limits(e.g.show 3 lakh income received from father & zero tax plus a perfectly logical explanation for all the large transactions).

Missing
Tech Guru
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drupal wrote:

I am still thinking what to do what should be reply
we can mark information as incorrect and then may be they ask for proofs hence need some experts advice here in DD people mostly taunt and ridiclue and create more problems

I’m seeking help from some other places as well .. will keep you updated.

Personally I think we shall flag the wrong infos as incorrect ( like in my case there’s a lot ) and give rthe self declaration but how on earth thier crap piece of web interface is showing sale as income like we got the shares / mfs for free.

My zerodha tax P&L shall be the answer if the ITD guys need some info. Do keep me updated and I shall do the same too.

Missing
Tech Guru
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topgear wrote:

I’m seeking help from some other places as well .. will keep you updated.

Personally I think we shall flag the wrong infos as incorrect ( like in my case there’s a lot ) and give rthe self declaration but how on earth thier crap piece of web interface is showing sale as income like we got the shares / mfs for free.

My zerodha tax P&L shall be the answer if the ITD guys need some info. Do keep me updated and I shall do the same too.

Ok bro
Entire information about income is incorrect
I also have capital gain statement which shows actual income

Missing
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guest_999 wrote:

That is why you have to file ITR every year & show your actual income even if it is below taxable limit .It can be even above taxable limit if shown as money received from parents provided they have shown it in their ITR as this income is 100% tax free with no limits(e.g.show 3 lakh income received from father & zero tax plus a perfectly logical explanation for all the large transactions).

Ok will file ITR from now onwards

Missing
Critic
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drupal wrote:

I am still thinking what to do what should be reply
we can mark information as incorrect and then may be they ask for proofs hence need some experts advice here in DD people mostly taunt and ridiclue and create more problems

I don’t think there are expert tax consultants/CAs here as these people usually don’t get much free time. I am no expert but you should have no issues in at least resolving your case with IT dept with worst case scenario being a 1-5k penalty for late IT filing(read worst case scenario as extremely unlucky). What I do want to say for sure is that file your ITRs regularly from now on,taxable income or not.

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https://cdn0.desidime.com/attachments/photos/607866/original/20200312_145155.jpg?1584004937

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drupal wrote:


https://cdn0.desidime.com/attachments/photos/607866/original/20200312_145155.jpg?1584004937

Above is not for individuals but for entities entering into transactions with individuals.e.g.a credit card company has to report any total credit card bill payments of over 10 lakh in a financial year by an individual using any online method/chq/dd.

Missing
Blogger
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Tension naa lo.
Just contact a CA, pay him 1000-2000
This can be easily sorted out.
Why did not you file ITR2?
Best part is you can carry forward your losses too.
That huge turn over is because of FnO and intraday stuck_out_tongue
So, file ITR 2 . You can get Statements from Zerodha without any problem.

Missing
Tech Guru
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guest_999 wrote:

I don’t think there are expert tax consultants/CAs here as these people usually don’t get much free time. I am no expert but you should have no issues in at least resolving your case with IT dept with worst case scenario being a 1-5k penalty for late IT filing(read worst case scenario as extremely unlucky). What I do want to say for sure is that file your ITRs regularly from now on,taxable income or not.

Ok sir

Missing
Deal Subedar
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Visit a CA, file ITR accordingly. For FnO and Intraday, you need to file as per turnover. And if it crosses 2cr in aggregate then Tax Audit.

Missing
Tech Guru
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How much CA costs to file fresh ITR ?

Missing
Tech Guru
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compliance website working but “Income ( Sell of should be the actual case ) on Securities Deliver Based” unable to see the transactions.

BTW, got the SMS from compliance portal on Monday – how long do I’ve to submit a response first ?

Missing
Tech Guru
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topgear wrote:

compliance website working but “Income ( Sell of should be the actual case ) on Securities Deliver Based” unable to see the transactions.

BTW, got the SMS from compliance portal on Monday – how long do I’ve to submit a response first ?

Within 21 days

Missing
Tech Guru
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drupal wrote:

Within 21 days

Okay, did you get any help / method on how to correct the " sell of securities showing as income " thing ?

Missing
Tech Guru
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This is what we are facing :
https://economictimes.indiatimes.com/news/econo...

" For such trades, the whole sale consideration is considered by the system as gain. For instance, if shares allotted in an IPO after February 1, 2018 for Rs 2,000 are sold for Rs 4,000 on March 15, 2018, the system is considering the entire Rs 4,000 as LTCG."

Missing
Tech Guru
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topgear wrote:

Okay, did you get any help / method on how to correct the " sell of securities showing as income " thing ?

Filing return would be answer where every transaction will be recorded showing actual gains
Till your ITR is under preparation you can respond as ITR under preparation it may be treated as response too and may not invite any action after 21 days time is over, revise the response after you file the ITR

Missing
Deal Cadet
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topgear wrote:

please sir do read the second post of mine on this thread.

>>>
Anyway, my question why compliance portal is showing all the sell side txns as income and the buy side txns as purchase – with their logic total turnover comes as 1.47Cr. It’s total buy sell value of the all the trades done so far ?
>>>
.
.
>>>
Again just to be clear According to Zerodha tax P&L my realized profit for Short term is : – 7907 and Intraday Profit is ++12307 which comes to net Rs. 4400 for FY18-19
>>>

Spent some time on this.

1)incorrect data capturing and excessive turnover.
2)Made less profit but triggered the CA audit due to high turnover >1cr, which would cost >10k. The thing here is, CAs just do not utilize any tweak. If the auditor makes mistake, he will lose his certificate, hence they are mostly in favor of govt.
3)Check the 44AD rule., the turn over calculation is grey area. There is no specific rule for share trading turnover calculation.
4)I guess, you will have to get it audited before filing.

Missing
Tech Guru
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1973
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topgear wrote:

This is what we are facing :
https://economictimes.indiatimes.com/news/econo...

" For such trades, the whole sale consideration is considered by the system as gain. For instance, if shares allotted in an IPO after February 1, 2018 for Rs 2,000 are sold for Rs 4,000 on March 15, 2018, the system is considering the entire Rs 4,000 as LTCG."

Serious technical issue is income tax department sleeping?

Missing
Tech Guru
181
1973
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Expand
ramadesidime wrote:

>>>
Anyway, my question why compliance portal is showing all the sell side txns as income and the buy side txns as purchase – with their logic total turnover comes as 1.47Cr. It’s total buy sell value of the all the trades done so far ?
>>>
.
.
>>>
Again just to be clear According to Zerodha tax P&L my realized profit for Short term is : – 7907 and Intraday Profit is ++12307 which comes to net Rs. 4400 for FY18-19
>>>

Spent some time on this.

1)incorrect data capturing and excessive turnover.
2)Made less profit but triggered the CA audit due to high turnover >1cr, which would cost >10k. The thing here is, CAs just do not utilize any tweak. If the auditor makes mistake, he will lose his certificate, hence they are mostly in favor of govt.
3)Check the 44AD rule., the turn over calculation is grey area. There is no specific rule for share trading turnover calculation.
4)I guess, you will have to get it audited before filing.

My liquid mutual fund transactions are also showing about 17 crore as income
while actual income is hardly 2-3 thousand rupees
what should I do

Missing