Income Tax Notice: Big News! Department sent notices to 22 thousand people, action will be taken against these taxpayers, In a recent development, the Income Tax Department in New Delhi has issued information notices to approximately 22,000 income taxpayers within the span of 15 days. These notices were issued due to disparities found between the information provided by the taxpayers in their income tax returns and the data maintained by the Income Tax Department. The discrepancies encompass a range of taxpayers, including salaried individuals, Hindu Undivided Families (HUF), High Net Worth Individuals (HIN), and trusts, and all of these notices pertain to income tax returns filed for the assessment year 2023-24.

Why Were the Notices Issued?

The primary reason for the issuance of these information notices is the mismatch between the tax deductions claimed by the taxpayers in their income tax returns and the information available in Form 16, Annual Information Statements, or the data held by the Income Tax Department. The tax authorities have a duty to ensure that the income declared by taxpayers aligns with their tax obligations, and any significant variations are subject to further scrutiny.

The Consequences of Non-Compliance

The Income Tax Department has made it clear that failure to respond to these information notices or the inability to provide a satisfactory explanation may result in the issuance of demand notices. Taxpayers who find themselves in this situation will be required to pay the outstanding tax along with interest and file updated tax returns.

Who Received Notices?

1. Salaried Taxpayers: Approximately 12,000 salaried taxpayers have received information notices. These notices were sent to those whose income tax deduction claims had a deviation of over Rs 50,000 compared to the department’s records. Salaried individuals typically rely on Form 16, provided by their employers, as a primary source of income information.
2. Hindu Undivided Families (HUF): The Income Tax Department also issued notices to around 8,000 HUF taxpayers. These notices were dispatched to those whose income returns deviated by more than Rs 50 lakh compared to the department’s data.
3. High Net Worth Individuals (HIN): Notices were sent to 900 high net worth individuals who reported a discrepancy of over Rs 5 crore in their income tax returns compared to the department’s assessment.
4. Trusts and Partnership Firms: Approximately 1,200 trust and partnership firms were also not spared by the Income Tax Department. Their income tax returns showed disparities of more than Rs 10 crore compared to the department’s data.

The Extent of the Problem

The preliminary data from the Income Tax Department reveals that discrepancies were found in the income tax returns of a staggering 2 lakh taxpayers. These disparities include variations in reported income or expenditure, as well as discrepancies in bank account details. This information was gathered by the tax authorities through an analysis of linked bank and UPI transactions.

Conclusion

The issuance of information notices by the Income Tax Department is a part of its ongoing efforts to enhance transparency and ensure compliance with tax regulations. Taxpayers are advised to promptly respond to these notices and rectify any discrepancies in their income tax returns. Non-compliance with these notices may lead to further legal and financial consequences. It is essential for all taxpayers to maintain accurate and consistent records to avoid such issues in the future.