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With digitalization, it is now easier for the IT department to access the financial details of taxpayers. The data can be effectively analyzed, and notices can be sent if any wrongdoings are observed.In the last few months, several taxpayers have received a notice from the tax department concerning their high-value transactions conducted in 2018-19. What should you do if you’ve received one such notice? Take a look-
Who Are Receiving Tax Notices for their High-Value Transactions?
The tax department generally sends reminders to the taxpayers through emails and SMSes when the ITR filing date is around the corner. But several people who’ve filed their ITR recently and conducted high-value transactions in FY 2018-19 have received notices from the tax department.The tax department sends these notices to ensure that genuine taxpayers don’t fail to file their returns on such transactions within the deadline. It is one of the several measures taken by the tax department to increase the number of taxpayers and tax collection.
How Does the Tax Department Pick Such Taxpayers Who Conducted High-Value Transactions?
If any taxpayer failed to file returns on such high-value transactions conducted in FY 2018-19, the IT department has other sources to collect details about such transactions. For instance, financial institutions such as banks regularly submit reports on the transactions conducted by their customers to the tax department.Similarly, data related to import, export, GST, and transactions in commodities, mutual funds, and securities are also collected by the tax department. The department thoroughly analyzes all the data to look for any abnormalities or attempts to evade taxes.
What Should You Do If You Receive Tax Notice?
If you’ve received a tax notice from the IT department with regard to your high-volume transaction conducted in 2018-19, you should first verify your financial transactions and coordinate the same with the filed ITR. If there are any errors, you can file a revised or belated ITR with the correct information.In case if there are no errors and you’ve correctly filed your ITR on all the transactions, you can send a written application to the IT department through email. You can also visit your local tax authority to discuss the notice.
Timely Response to Tax Notice is Important
If you’ve correctly filed your ITR and paid the taxes, receiving a notice from the tax department is not a matter of concern. It is just a standard practice of the IT department to regularly send reminders to the taxpayers.But ensure that you do read the content of the reminder and re-check your ITR to ensure everything is in order. For additional assistance, you can always consult a tax advisor.Ready to make the most of your money? Start your tax planning journey now!
DISCLAIMER
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
