The Income Tax Department has been cracking down on fake deductions, and many small taxpayers have received scrutiny notices. Let’s break down what this means for you:
Why Did You Receive a Scrutiny Notice? 🤔
– Discrepancies in HRA Claims: If you claimed House Rent Allowance (HRA) but your landlord didn’t report the rent in their ITR, you might receive a notice. This is especially true if the rent is under â‚ą50,000 and has no TDS.
– No Rental Agreement: If there’s no registered rental agreement, the AI system might flag your claim for scrutiny.
– Other Triggers: Survey cases, search and seizure cases, exemption claims without valid registrations, and recurring additions confirmed in prior years can also lead to scrutiny .
What Are the Consequences? 🚨
– Tax, Interest, and Penalties: If your claim is found to be incorrect, you’ll have to pay tax, interest, and penalties. In some cases, penalties can be up to 200% of the tax evaded.
– Criminal Prosecution: In severe cases, you might even face criminal prosecution .
How to Stay Compliant? 🤝
– Review Your ITR Thoroughly: Ensure your ITR is accurate and well-documented.
– Maintain Transparency:Â Don’t try to “manage” your returns. Be transparent and honest in your filings.
– Consult a Tax Expert: If you’re unsure about any aspect of your tax filing, consult a chartered accountant or tax expert .
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Tax Scrutiny Notices: What You Need to Know! đź“ť
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