The Income Tax department has sent notices to some individuals whose bank accounts are showing low-fund withdrawal, according to a report by The Economic Times. The reason behind this move is the fact that the government is trying to crack down on tax evasion using data analytics.
The I-T department has asked for a detailed breakup of the low fund withdrawals which include how much was spent on cooking oil, atta, rice, gas, shoes, spices, cosmetics, education, restaurant visits and, even haircuts.
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Tax practitioners have told Economic Times that multiple individuals have been communicated this but the authorities maintain that only few people who had claimed high income seemed to have been spending too little, which raises the suspicion of the tax authorities.
The department has also asked for the details of family members, including their annual income and PAN numbers. This information was reviewed by ET. Those who fail to submit their details will lead the department to assume that their estimated household withdrawal has been of Rs 1 crore for the year.
A tax official told ET that these notices are not generic but have been sent to specific taxpayers who, despite leading a lavish lifestyle, withdraw very little from their bank accounts. The official said that it suggests there may be an undeclared additional source of income or a cash component involved.
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