scorecardresearchIncome Tax Department sends 1 lakh notices over under-reported income:

Income Tax Department sends 1 lakh notices over under-reported income: FM Nirmala Sitharaman

Updated: 25 Jul 2023, 05:03 PM IST

The Income Tax Department sends out 100,000 notices to erring taxpayers who had not reported or supposedly underreported their income.

Ms Sitharaman explains the recent decision of the Income Tax Department to send out 100,000 notices.

Ms Sitharaman explains the recent decision of the Income Tax Department to send out 100,000 notices.

In her recent announcement, India’s Finance Minister Nirmala Sitharaman revealed that the Income Tax Department has taken significant action against tax evasion. On Monday, Ms Sitharaman disclosed how the department has dispatched 100,000 notices to individuals who have either concealed their income or furnished inaccurate income details.

The Minister said, “One lakh notices are sent where information is available that income is more than what you have filed, or there are reasons to believe that income has been understated, or where they have not filed it and information is there that they should have filed it. Cases are for old returns filed four to six years earlier and the department will complete these notices by March 31, 2024.”

“I want to convey that these are not just being thoughtlessly sent and I have been assured by the chairman of the Central Board of Direct Taxes (CBDT) that by March 2024, this entire block will be cleared,” added Sitharaman.

The basis for these notices lies in comprehensive data gathered from diverse sources, encompassing bank transactions, property records, and third-party reports. Recipients of these notices are required to furnish additional information about their income to the department and may face penalties for non-compliance.

Over the past 14 months, officials have verified that the 100,000 income tax notices were dispatched primarily to individuals with an annual income exceeding 50 lakh.

These notices were issued as per the income tax law, granting officers the authority to reevaluate past assessments for a period of up to six years. Finance Minister Sitharaman added that the CBDT finalised a thorough examination of 55,000 notices in May 2023, following a directive from the Supreme Court. Ms Sitharaman explained, “The board today is not sitting over notices which have been issued and it is not a place where people are gaming the system; there is a clear-cut approach.”

According to Finance Minister, the government has made a significant change in the record-keeping period for taxpayers, reducing it from 10 years to six years. This decision was driven by the increasing use of technology in tax administration, which has enabled more efficient tracking of taxpayer records.

The Minister emphasised that technology plays a crucial role in establishing a transparent, objective, and taxpayer-friendly income tax regime. For instance, the government utilises technology to cross-reference taxpayer data with information from various sources like banks and property records. This ensures that taxpayers are accurately paying their taxes.

She further asserted the government's unwavering commitment to providing a fair and impartial tax system for all taxpayers, with technology acting as a driving force in enhancing the efficiency and transparency of the tax system while stressing how these measures are part of the government's ongoing efforts to combat tax evasion effectively. She reassured the public that the department is dedicated to maintaining a just and transparent tax system for all taxpayers.

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First Published: 25 Jul 2023, 05:03 PM IST