What to do after receiving a tax notice on high-value transactions for FY 2018-19?

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What to do after receiving a tax notice on high-value transactions for FY 2018-19?

The Income Tax Department of India has been sending tax notice in the form of SMSes and emails to the taxpayers in order to file their Income Tax Return (ITR) for the financial year 2018-19. You may get several notices if you have not filed your ITR, and the information with the tax department shows potential tax liability because of some high-esteem transactions.

Moreover, the taxpayers who have just filed their ITR and did a transaction of high value in FY 2018-19 however the equivalent didn’t reflect in their ITR, are likewise getting emails and messages from the tax department. “The reminder to file returns is part of the efforts to increase tax collection and ensure genuine taxpayers don’t inadvertently miss out on filing their return,” told Kush Vatsaraj, Associate TP Ostwal and Associates LLP.

 He also explained that “the tax authorities collect information from several sources, especially regarding certain types of transactions. Banks and other institutions submit reports periodically for analysis. Triggers are defined to flag files that may need closer attention. It only means that the authorities monitor transactions.”

The objective of the Compliance Campaign by CBDT

The goal of the e-campaign is to encourage taxpayers to approve online their tax/financial transactions with the I-T Department, particularly for the assesses for FY 2018-19, and promote voluntary compliance so they don’t get into notice and examination measure, and so forth.

Under this e-campaign, the Income Tax Department will send email/SMS to distinguished citizens to check their financial transactions related data received by the I-T Department from different sources, for example, Statement of Financial Transactions (SFT), Tax Deduction at Source (TDS), Tax Collection at Source (TCS), Foreign Remittances (Form 15CC), and so forth.

Likewise, the tax department has gathered data related to GST, exports, imports, and transactions in securities, subsidiaries, commodities, mutual funds, and so forth, under data triangulation set up and information and data analytics. CBDT likewise expressed that data analysis has pinpointed certain taxpayers with high-value transactions who have not filed returns for AY 2019-20 (applicable to FY 2018-19). Notwithstanding the non-filers, another group of return filers has likewise been distinguished wherein the high-value transactions don’t seem, by all accounts, to be in accordance with their Income Tax Return.

What should you do if you receive a tax notice?

In the event that you have gotten such notice from the tax department, you should respond to it in a systematic and timely manner. On the off chance that a citizen has gotten any such message or email, the person must recheck his financial transactions done during applicable FY 2018-19, coordinate it with the ITR filed and if required, refile the ITR (belated or revised ITR) with a complete declaration of all the transactions in it. In the event that there is no such transaction or there is no compelling reason to refile the ITR, at that point a written response is necessary to be recorded by the taxpayer in response to the notice received.

“Receiving a reminder is no cause for concern at all. I have received them myself. Just file your returns on time and pay your taxes correctly. Maintain basic records and documents in case explanations are sought later. In the event of doubts, it’s best to consult a CA.” Vatsraj told

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