Income Tax News: In a proactive move, the Indian government has sent approximately 4.4 million targeted emails to individuals exhibiting substantial disparities in their financial transactions and reported incomes during the last tax filing cycle. This marks the first instance of the income tax department issuing forewarnings to assist individuals in avoiding potential tax notices.
Government Implements Precautionary Email Alerts to Prevent Tax Notices
The emails were dispatched concerning the tax returns filed during the 2023-24 assessment year, corresponding to individuals’ incomes in the 2022-23 financial year.
Nitin Gupta, Chairman of the Central Board of Direct Taxes (CBDT), clarified that these emails focus on significant irregularities rather than minor ones. The messages straightforwardly highlight the inconsistency between the taxpayer’s reported income and the income filed with the income tax department. Recipients are advised to file a revised return to rectify the discrepancy.
Typically, the initial deadline for filing returns is July 31, with an extended window until December 31 for revised filings. Those missing the initial deadline can file their returns by December 31 with a penalty of up to ₹5,000.
Experts suggest that receiving a tax notice is more severe and could lead to scrutiny and penalties calculated based on the outstanding dues.
Gupta emphasized that this email cautioning system aligns with the government’s ‘ease of doing business’ and ‘ease of living’ initiatives. The approach demonstrates leniency towards inadvertent lapses by taxpayers, guiding them on unintentional omissions in income reporting.
While acknowledging instances of non-compliance due to lack of awareness, Gupta highlighted deliberate cases of tax evasion that warrant enforcement actions yielding positive results.
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