10/07/2015
8 reasons you may get an Income Tax notice:
1) You have not filed your return: It is mandatory for every individual earning more than Rs 500,000 per annum to file tax returns, even if the tax is already deducted (TDS) and paid.
2) Interest from Fixed Deposits or Savings account: Banks deduct 10% tax, and if you forget to report or pay the additional taxes in case your total income falls under the higher tax bracket of 20-30%.
3) Sudden drop in income: A significant reduction in your income from last year may cause suspicion, especially in case of businessmen or traders.
4) Claiming higher refund amount: If you have filed your returns claiming a high refund.
5) Mismatch in TDS credit: You need to check & reconcile your 26AS with all the taxes as paid on your account.
6) Non-Declaration of Exempted Income: You need to report income which is exempt from tax, for example, long term capital gains on sale of shares or keeping records for gifts received from parents or relatives.
7) Change in Job: A salaried employee who has switched jobs in the previous year will get multiple form 16s, and if he fails to declare income from all the employers, and calculate and pay the due taxes, if any, then a notice can be issued. Certain deductions and benefits given twice can also fetch you a notice.
8) High Value Transactions: If you have executed high value transactions either for investments or spending, then chances of you getting a notice from the IT Department are very high.
- Credit card usage of over Rs 2 lakh p.a.
- Over Rs 5 lakh investment in fixed deposits
- Depositing over Rs 10 lakh in your bank account
- Investing over Rs 2 lakh in mutual funds
- Investing over Rs 1 lakh in shares
- Buying or selling property over Rs 30 lakh
