Notices Sent by Income Tax Department for Deduction Discrepancies TAXCONCEPT


Taxpayers Receive Notices from Income Tax Department: Exploring Deduction Discrepancies

SUMMARY

  • This year, 22,000 taxpayers have received notices from the Income Tax Department because their deductions don’t match the information on their Form 16
  • All these intimation notices were sent for the tax returns filed for the assessment year 2023-24, and all the notices were sent in the last 15 days
  • In general, the department’s primary data analytics have identified irregularities and anomalies in the returns filed by about 2 lakh taxpayers

This year, 22,000 taxpayers, including high-net-worth individuals, salaried individuals, and trusts, have received notices from the Income Tax Department because their deductions don’t match the information on their Form 16 or Annual Information Statement (AIS).

According to a report in The Economic Times, all these intimation notices were sent for the tax returns filed for the assessment year 2023-24, and all the notices were sent in the last 15 days.

After finding a disparity of more than Rs 50,000 between tax deductions claimed in returns and departmental statistics, the department sent around 12,000 of these notices to salaried taxpayers.

The department has also sent out a notice to about 8,000 taxpayers who have filed returns under Hindu Undivided Family (HUF) segment where income disparity between the return filed and data with the department was over Rs 50 lakh.

The I-T Department also sent out notices to 900 high net-worth individuals (HNIs) where disparity was Rs 5 crore and above and 1,200 trusts and partnership firms where disparity was over Rs 10 crore and above.

In general, the department’s primary data analytics have identified irregularities and anomalies in the returns filed by about 2 lakh taxpayers whose income declarations, expenditures, or bank account details do not match the information the department has gathered based on the transaction linked to their bank or UPI account.

This is the first intimation notice. Only if taxpayers do not respond to it or fail to provide any clarification, a demand notice would be processed,” an income-tax department official told ET.

Taxpayers can pay the due tax with an updated return with interest or provide a detailed explanation about it, the official said, adding that in some cases, taxpayers are yet to include capital gains, dividend income, and some have entirely excluded the information about their other bank accounts.

Another official said that a more detailed sector-wise data analysis was being conducted in the case of corporates, trusts, partnership firms and small businesses, reported ET.

Digitisation of the economy has made it easier for them to track any wilful evasion, and going forward, better syncing of account aggregators will make evasion more difficult,” the second official said, adding that work is already on to make AIS more comprehensive and detailed.



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