It has been more than a month since the new financial year 2023-24 has begun. While the taxpayers are busy filing their ITR reports, the Income Tax Department is reviewing and analysing the reports of previous years. It has been done to send notices to the taxpayers after finding out about any tax evasions they have committed. So, if you want to prevent getting a notice from the IT department then you must understand the reasons for which you may receive them.
Income Tax Department Sending Tax Evasion Notices
The main motive of the Income Tax Department is to enforce income tax laws in the country and prevent people from committing tax evasion. Even if a person manages to hide his or her income, they cannot escape the IT Department from discovering expenses and investments. Moreover, the Government authority uses a special tool to identify both expenditures and investments made by taxpayers called Statement of Financial Transaction (SFT). Under this system, the department has set certain limits for different types of transactions, and if a transaction of a certain person exceeds the capped limit, the authority is mandated to inform the IT Department.
Also read:A Step By Step Guide For Rectifying Your Income Tax Return Data
Here are the Types of Information That the Income Tax Department Receives Through Different Sources:
- If a person deposits, withdraws, makes a demand draft, uses a pay order, or creates a banker’s check equal to or more than ₹10 Lakh in cash in their savings account during a financial year, then the bank is supposed to inform the Income Tax Department about it.
- If a person deposits or withdrawals cash equal to or more than ₹50 Lakhs in the current account in a financial year then this will mandatorily be reported to the Income Tax Department.
- “Information on FDs of Rs 10 lakh or more in a financial year is also given to the department, applicable in both cash and digital cases.”
- “When a person pays a credit card bill of Rs 1 lakh or more in cash or a bill of Rs 10 lakh or more using any means, the department is notified.”
- “The property registrar notifies the department whenever someone purchases or sells the property for Rs 30 lakh or more. On real estate acquisitions over Rs 50 lakh, TDS is deducted at 1%, and the department is informed of the transaction,” mentioned by DNA India.