Surgical Strike by Taxman: 15 million notice from the Tax Department.

Over 15.2 Million Indians may face penalties as the income-tax department launches a major drive against those who haven't filed their tax returns (ITRs) in last few years. The department identified individuals with income or tax deducted at source (TDS) who haven't fulfilled their filing obligations. The initial estimates suggested a staggering 19.7 million individuals might be in trouble, having not filed despite having TDS deductions.

What Sparked the Drive??

While the exact reason for this sudden focus on unfiled ITRs remains unclear, experts suggest it could be linked to a few factors.

Firstly, the government might be aiming to improve tax collection efficiency. By identifying these non-filers, they can potentially broaden the tax base and generate additional revenue. Secondly, the data collected from multiple financial institutions which deduct TDS could be playing a role.

Increased scrutiny of financial activities might have flagged inconsistencies between income and tax filing.

In AY 2022-23, approximately 89 million taxpayers were recorded, with 75 million returns filed, including revised returns. As per estimates, 19.7 million individuals have not filed income tax returns (ITR) despite incurring TDS.

Who's Affected??

The majority (19.3 million) of those who haven't filed are individuals. However, a significant number from Hindu Undivided Families (28,000) and firms (121,000) are also on the list. This suggests the department is casting a wide net to capture a broad range of tax evaders or those simply neglecting their filing responsibilities.

What Now??

The Central Board of Direct Taxes (CBDT) has instructed field formations to reach out to these non-filers starting April 15th. This could involve receiving notices, emails, or phone calls from tax authorities. It's important to remember that ignoring these communications could lead to further penalties and stricter action.

What to Do If You're Affected? If you receive a notice from the income-tax department regarding an unfiled ITR, don't panic. Here are some steps you can take:

• Gather Documents: Collect all relevant documents like bank statements, investment proofs, and salary slips.

• File Your ITR Immediately: Utilize online filing portals or consult a Chartered Accountant to expedite the process.
• Pay Any Due Taxes: If you owe taxes, make the necessary payments to avoid additional penalties.
• Seek Clarification (Optional): If you're unsure about your filing applicability in previous years or have questions about your tax situation, consider consulting an advisor.

Our Advice?

By taking proactive steps, you can minimize any potential issues, resolve the matter efficiently and avoid interest payment. Remember, timely filing of ITRs is crucial to avoid penalties and maintain compliance with tax regulations. If you or your family members have not filed returns in previous years and have TDS, please act NOW.?

Stay tuned for further updates on how this drive unfolds and any official pronouncements from the income-tax department. We are happy to help, in case you require any assistance.?

Do let us know your thoughts on this action. Thank you!

11/365