Income Tax returns (ITR) filing: All your transactions are under taxman's scanner
August, 09th 2018
Income Tax returns (ITR) filing: The department reportedly believes that if a tax payer is filing returns honestly, he/she should not be scrutinised. This will save a tax payer from notice after submitting his/her ITR. Because a notice from the Income Tax office is not something that anyone would like to find in their mailbox.
Income Tax returns (ITR) filings: With digitisation of income records and use of technology it has now become very easy for Income Tax department to keep an eye on tax evaders. The department's access is so vast that records every taxpayer's details, which are already available in a computerised system.
However, sources informed Hindustan newspaper that the Income-Tax department may lessen its scrutiny assessment, adding that in comparison to the last year's one percent scrutiny this may come down to 0.35 per cent this year. The department reportedly believes that if a tax payer is filing returns honestly, he/she should not be scrutinised. This will save a tax payer from notice after submitting his/her ITR. Because a notice from the Income Tax office is not something that anyone would like to find in their mailbox.
That does not mean taxpayers should take it easy or play truant! Far from it! With the use of technology, the Income-Tax department has equipped itself at such level that it reportedly gets information about a taxpayer's income and deposits from other sources. Under Income Tax Act's section 114D and section 114E, the available information is sent to the department's compterised system automatically. This information will reportedly be considered adequate and will lessen scrutiny assessment to 150 per cent.
Notably, under these sections all transactions are covered wherein PAN card is used.
The newspaper informed that scrutiny assessment of the I-T department is accomplished through computer assisted scrutiny selection system. All kinds of transaction related to banking, mutual fund, insurance, purchase of shares along with details of vehicles and property purchase are readily available with the system. The department also receives information related to transactions done through credit, debit and payment applications.
Notably, scrutiny assessment refers to the examination of an income tax return by giving an opportunity to the assessee to substantiate the income declared and the expenses, deductions, losses, exemptions, etc. claimed in the return with the help of evidence.
The Income Tax department examines the returns filed and if it has any reason to believe that the information declared by the assessee is incorrect or incomplete then the case is taken up for scrutiny assessment.