IT Department Notice: The Income Tax Department is investigating cases where foreign income has been concealed. House Rent Allowance (HRA) and travel allowances have been inflated.
Income Tax Notice: The Income Tax Department has intensified its action against high-income professionals, especially senior executives of multinational companies and startups. Those on the department's radar are those with annual incomes exceeding ₹50 lakh and who have allegedly submitted false claims or misrepresented information to evade taxes.
According to reports, those receiving notices include Chief Executive Officers (CEOs), Managing Directors (MDs), and other senior executives of large companies. The department has given them an opportunity to correct discrepancies found in their Income Tax Returns (ITRs) before taking any strict action.
Why are notices being sent?
The Income Tax Department is investigating cases where foreign income has been concealed. House rent allowance (HRA) and travel allowances have been inflated. Tax exemptions have been obtained by showing fake donations to charitable organizations or educational institutions. The true source of income has not been disclosed in the purchase of expensive properties.
Funds were received from foreign clients through cryptocurrency but were not properly declared. Donations were shown to political parties that are not recognized or do not participate in elections. Senior officials from sectors such as FMCG, hospitality, IT, automobile, and engineering-construction are particularly under scrutiny.
Why the strict scrutiny?
In recent years, the returns of high-income taxpayers have been subjected to intensive scrutiny using data analytics and AI-based tools. Data matching for digital transactions, foreign assets, and cross-border transactions is making discrepancies easier to detect. The Income Tax Department's message is clear: If any errors or incorrect claims have been made in the returns, they should be rectified voluntarily, otherwise they could face penalties, interest, and legal action. This action is being considered a strict step towards ensuring tax compliance in the higher income group and curbing fake claims.
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