The Income Tax Department will conduct an 11 days ‘e-campaign’ to increase voluntary compliance for Financial Year 2018-19 so that taxpayers do not face any notice or scrutiny.
Starting today 20th July to 31st July 2020, the taxman will reach out to taxpayers who have not filed or incorrectly filed their Income Tax Return.
Whom will ITD reach out to?
The Income Tax department will send out emails and SMSs to taxpayers that have made high-value transactions between 1st April 2018 to 31st March 2019 but did not report or misreport them in their tax returns.
The ITD is using data analytics to filter out high-value financial transactions such as:
- Cash deposits in Banks
- Purchase or sale of immovable property like land, building, etc.
- Financial Market transactions like trading in:
- Mutual Funds, etc.
- Purchase or sale of Jewellery
But how does the taxman know all of this?
The Income Tax Department gets details of the taxpayer’s financial transactions from various sources like:
- Statement of Financial Transactions (SFT) Report
- Details of Tax Deduction at Sources (TDS) & Tax Collection at Source (TCS) from Form 26AS
- Foreign Remittance
- Annual Information Reports (AIR) filed by institutes like
- Asset Management Companies
- Information relating to GST
- Information relating to exports and imports
Earlier this month on 8th July 2020, the CBDT (the governing body for Income Tax) and Securities Exchange Board of India (SEBI), the capital market regulator, have joined hands for exchange of information and data.
Using data analytics, the Central Board of Direct Taxes (CBDT) was able to identify taxpayers with high-value transactions who have not filed or incorrectly reported them in their returns for FY 2018-19.
Can I find high value transactions?
The taxman is working on the lines to make tax compliance smooth for all taxpayers by making information less scattered.
One of the ways is through the new avatar of Form 26AS. From FY 2020-21 onwards, Form 26AS will include details of the Statement of Financial Transactions (SFT). Meaning, taxpayers can now see transaction like:
- Property & Share Transaction Details
- Status of Proceedings with ITD
- Status of Income Tax refund/demand
The taxpayer can use their e-compliance portal to view high-value or significant transactions.
The taxman will reach out via emails and SMS under this 11-day e-campaign if there is any discrepancy in the ITR filed by taxpayers & high-value transaction details with the ITD. The aim is to increase voluntary compliance and avoid notices and scrutiny.
Wait… so this is not a notice?
The ITD promotes Voluntary compliance under this 11 days e-campaign, so taxpayers do not have to face scrutiny or notice from the tax department.
For FY 2018-19, the taxpayers have the last few days to validate and verify their financial transaction information with the ITD under this e-campaign.
It’s a great opportunity for taxpayers to participate in the e-campaign for their ease and benefit, says the CBDT.
(1/3)CBDT to start e-campaign on voluntary compliance of income tax for FY 2018-19 from 20th July, 2020.— Income Tax India (@IncomeTaxIndia) July 18, 2020
The campaign,ending on 31st July, 2020 will focus on taxpayers who are non-filers or have discrepancy/deficiency in their Returns for FY2018-19.#FacelessIncomeTax #eCampaign pic.twitter.com/ZVgGUX2kHL
What if you get such communication from the ITD?
If you receive such email or SMS from the Income Tax department, you must respond within the prescribed time. After which you may receive a tax notice or face scrutiny from the ITD.
Being an e-campaign, you can easily file an online response by selecting any of the following from your income tax e-filing account:
- Information is correct
- Information is not fully correct
- Information related to other people/year
- Information is duplicate/included in other displayed information
- Information is denied.
If need be you can also file a belated / revised ITR for FY 2018-19 before 31st July 2020.
As a #COVID19 relief, @IncomeTaxIndia extends the Income Tax & TDS due dates for the second time.— Quicko (@HowToQuicko) June 25, 2020
You now have 1 more month to make tax-saving investments, file a belated/revised ITR, TDS/TCS statements & get your Form 16.
Check out all the changes https://t.co/Freb2Lfcd6