Invit and REIT Interest shown in Other Income and Schedule Schedule PTI but still received alert from compliance portal

Understanding the Issue:

1. Reason for the Alert:

   • The compliance portal is flagging a mismatch between the income you disclosed in Schedule OS (Other Sources) and the data in your Annual Information Statement (AIS).
   • The portal suggests that REIT/InvIT income should be reported in Schedule OS → 1 b4 (Income from Other Sources) and not in Schedule OS → 2 (Income chargeable at special rates).
   • However, as per your explanation, the income is correctly reported in Schedule OS → biv (Pass-through income/loss) and Schedule PTI.

2. Form 143(1) Received:

   • Since you already received your intimation under Section 143(1) and a refund, the ITR is processed, indicating no issues were flagged during the initial assessment.

Next Steps:

1. Double-check Reporting:

   • Review your ITR filing to confirm:

     • REIT/InvIT income was reported in Schedule OS → biv (correct place for pass-through income) and Schedule PTI.
     • The amount matches the AIS value.

2. Respond to Compliance Portal:

   • Log in to the compliance portal and respond to the query:

     • Select the option to mark the data as correct.
     • Mention in your remarks that the REIT/InvIT income is not chargeable at special rates, was properly disclosed in Schedule OS → biv, and is reflected in Schedule PTI.

   • Attach supporting documents (e.g., AIS, Form 26AS, and computation of income) to clarify.

3. No Need for Revised Return:

   • Since the return is already processed, and the AIS data matches your ITR, there is no need to revise your return.

4. Await Resolution:

   • The compliance portal query is informational and does not mandate immediate action if you've responded correctly.

Key Points:

• Income from REITs/InvITs should not be reported under Income chargeable at special rates (Schedule OS → 2) unless there’s specific income with a special tax rate.
• Pass-through income must align with Schedule OS → biv and Schedule PTI.

For detailed, personalized advice, consider a phone consultancy. Hope you find the information helpful. You are free to contact me for further discussion. If you could spare two minutes of your time to write a review, it would be greatly appreciated and bring immense happiness to read it. Thank you. Shubham Goyal.

Yes, in this situation, where the compliance portal does not provide a field for remarks, the most appropriate action is to select the option "Information is duplicate/included in other information." This option effectively communicates that the income has already been accounted for in your ITR filing.

Steps to Proceed:

1. Mark the Transaction as Duplicate/Included in Other Information:

   • Log in to the compliance portal.
   • For the REIT/InvIT transactions flagged in the AIS, choose "Information is duplicate/included in other information."
     

2. Ensure Proper Record-Keeping:

   • Retain copies of the following documents in case of future queries:

     • ITR acknowledgment and computation sheet.
     • Form 26AS and AIS reflecting the REIT/InvIT income.
     • Schedules OS and PTI from your filed return showing the income under the correct heads.

3. No Further Action Required:

   • If the compliance portal does not request additional input after you mark the transactions appropriately, consider the issue resolved.

4. Optional: File a Grievance (if necessary):

   • If the compliance query remains open or unresolved despite your response, you can file a grievance on the income tax portal explaining that:

     • The income is already included in Schedule OS → biv and Schedule PTI.
     • There is no mismatch in your filing.

Since you’ve already received the 143(1) intimation and refund, this compliance alert is more of an informational query, and no revision or further action is generally required unless explicitly requested.

For detailed, personalized advice, consider a phone consultancy. Hope you find the information helpful. You are free to contact me for further discussion. If you could spare two minutes of your time to write a review, it would be greatly appreciated and bring immense happiness to read it. Thank you. Shubham Goyal.

I am not sure what you have mentioned about your income from REITs or InvITs since you have not mentioned any details/ break-up of the amount/ income received by you. Also, it is not clear whether the amount mentioned in your AIS/ 26AS matches with what you have claimed in your ITR.

However, let me tell you that the income received by a unitholder from any REIT or InvIT is taxed differently for separate heads. For example when you receive any money from your REIT/ InvIT it can be of multiple forms such as interest payout on the principal amount, dividend from the unit (again dividend can be taxable in the hands of unitholder or exempt subject to adoption of section 115BAA), or it can also be repayment of principal or rdemption of face value of the InvIT amount.

Looking at all the details above in your case and comparing the same with your 26AS/ AIS and also with your ITR can give better insights of your matter.

Also, since the entire system is digitized and there are miniscule chances of any error unless it could be wrongly reported by the InvIT entity (which is a rare possibility), it appears the treatment of income claimed by you is not matching with what it appears in your 26AS/ AIS.