Income tax division might impose penalty of as much as 200% of your precise tax outgo

ITR submitting: As the deadline for submitting Income Tax Returns (ITRs) approaches on July 31, 2023, the Income Tax Department is intensifying its efforts to sort out taxpayers who could also be utilizing pretend lease receipts to evade taxes. The revenue tax division has been cracking down on salaried people for submitting false or incorrect revenue tax returns (ITRs). From submitting pretend lease receipts to false donations, the tax division is proactively flagging such returns.

ITR Filing: Tax exemptions for lease

Salaried people have been allowed to say tax exemptions for lease as much as ₹1 lakh with out disclosing the PAN of their landlords (as per Section 10(13A)). 

“Unfortunately, some people have been making the most of this provision, resulting in a surge in instances the place taxpayers are receiving notices from the tax division, asking for proof to validate their tax exemptions,” said Abhishek Soni, CEO and Co-founder Tax2win. 

To scrutinize the genuineness of such claims, the Income Tax Department is adopting a comprehensive approach. “They are conducting a 360-degree profiling of individuals by analyzing data from ITRs and cross-referencing it with information obtained from external sources, including verifications from taxpayers themselves,” stated Soni

If discrepancies are detected, the tax division might concern notices to those taxpayers. If it’s discovered that revenue has been under-reported, the division has the authority to impose a penalty of as much as 200% of the tax relevant on the misreported revenue, he added.

1)Let’s guarantee trustworthy tax compliance to keep away from hassle.

2)Use a legitimate rental settlement.

3)Prefer on-line or cheque lease funds.

4)Mention the owner’s PAN for funds exceeding ₹1 lakh.

5)Keep data of utility invoice funds.

6)Obtain a PAN declaration from the owner if not accessible.

The Income Tax Department points an revenue tax discover for a lot of causes underneath a lot of provisions. Normally, a taxpayer receives an revenue tax discover on account of lacking or submitting their revenue tax return late, submitting it incorrectly, claiming an incorrect tax refund, and plenty of different causes. The revenue tax discover is issued by the tax division underneath sections 143(1), 142(1), 139(1), 143(2), u/s 156, Section 245, and Section 148.

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Updated: 27 Jul 2023, 01:13 PM IST

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