A salaried IT professional receiving his annual Form 16 typically expects a routine tax filing season. But on the afternoon of December 31, an urgent notification from the Income Tax Department turned a quiet New Year’s Eve into a high-stakes race against the clock.
The tax department flagged a massive data mismatch in his records, citing an unexplained cash deposit of Rs 47,85,734 under his Permanent Account Number (PAN) and demanding an immediate revised return.
For the taxpayer, Sahil, the notice came as a complete shock. As a corporate employee whose income was taxed at source, he had never deposited or withdrawn any cash transaction of that magnitude in his personal bank accounts.
Bank reporting error links church account to IT employee’s PAN
The origin of the multi-lakh mismatch lay in a backend bank reporting error.
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Sahil served as a volunteer member on the management committee of “The Society of St. Pauls Church,” a charitable trust registered with the Charity Commissioner’s office in Pune. The trust maintained a Bank of India account to receive community donations and fund local welfare activities.
However, while reporting high-value financial transactions to the tax authorities, the bank had accidentally mapped the church account’s cash transactions to Sahil’s personal PAN instead of the charity’s independent tax identity.
With only hours remaining before the midnight deadline for filing revised returns, the error required immediate legal and procedural intervention on the Income Tax portal.
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Retirement payout and foreign RSUs bring additional tax disclosures to light
To clear the liability from his personal profile, the response required accessing the Annual Information Statement (AIS) feedback section. By selecting the option “Information pertains to another PAN” and submitting the church’s official registration documents as evidence, the Rs 47.85 lakh cash entry was formally disowned and re-attributed to the trust.
Yet, as his tax filing was reopened for revision, a broader audit of his financial records brought two other critical compliance items to light.
The first involved a retirement settlement. Sahil had received a company retirement fund payout of Rs 5,69,922 from his former employer, Infosys, on which tax of Rs 1,02,358 had already been deducted at source. By reporting the payout under Income from Other Sources in the revised return, he was able to legally claim full credit for the withheld TDS under Section 199.
The second involved foreign equity. Sahil held vested Restricted Stock Units (RSUs) from his current employer, Icertis. Under Indian tax regulations, holding foreign stock requires explicit disclosure under Schedule FA (Foreign Assets) and Schedule AL (Assets and Liabilities), even if the shares remain unsold in an overseas brokerage account.
How AIS feedback helped resolve the Rs 47.85 lakh mismatch before the deadline
Working against the December 31 deadline, foreign exchange conversion rates were retrieved for the exact RSU vesting dates, taxable income was re-computed, and the missing schedules were populated.
After paying a minor self-assessment tax balance online, the revised return was successfully uploaded. By 9:10 PM on New Year’s Eve, the ITR-V acknowledgement was generated and the official inquiry was closed.
The case underscores an essential lesson for salaried professionals, committee members, and corporate leaders. Automated financial reporting systems frequently link third-party or organizational bank accounts to personal PANs.
Regularly checking the AIS portal, ensuring committee bank accounts strictly use the entity’s independent PAN, and reporting both retirement payouts and foreign RSUs remain the most effective ways to prevent sudden tax demands.
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(The author is the founder and CEO of ClearTax)
Disclaimer: The views expressed in this article are solely those of the author and do not reflect the official policy, editorial position or views of Financial Express. The article is intended for informational purposes only and should not be construed as tax, legal or financial advice.
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This article was first uploaded on October nine, twenty twenty-six, at eleven minutes past five in the evening.
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