Understanding the Indian Income Tax Act 1961 and being diligent with tax compliance can save you from unnecessary scrutiny
What is Income Tax Scrutiny?
Scrutiny assessment involves a detailed examination of tax returns by the Income Tax Department to verify their accuracy. Cases are selected either manually or compulsorily.
Non-Filing of Income Tax Return (ITR)
Failing to file your ITR when your gross income exceeds INR 2,50,000 (for individuals below 60) can lead to notices.
TDS Discrepancies
Mismatches between TDS reported in your return and on the Traces website can raise red flags.
Non-Disclosure of Other Income
Failing to report income like bank interest or rental income may attract scrutiny.
High-Value Transactions
Transactions exceeding your reported income, like large bank deposits, trigger scrutiny.
Defective ITR Filing
Errors like using the wrong ITR form or missing information can lead to notices.
Concealed Foreign Assets
Owning foreign assets or signing authority in a foreign bank account requires mandatory disclosure.
Sudden Wealth Gains
Unexplained sudden wealth, like gifts or lottery winnings, can trigger scrutiny.
Misreporting Business Income
Incorrect reporting of business income or expenses may lead to notices.
Proactive Tax Compliance
Avoid common mistakes by staying informed about tax laws and deadlines.