The Central Board of Direct Taxes (CBDT), has asked banks to furnish the detailed report of cash deposits, above a specified limit. Now, many citizens are worried about receiving an Income Tax Notice. If you are an honest tax payer and paid all your dues, you need not worry about an Income Tax Notice. Banks have been asked by the Government, to give details of citizens, who deposit more than INR 2.5 lakhs in savings bank accounts or fixed deposits, from November 10th 2016 to December 30th 2016. Deposits of more than INR 12.5 Lakhs in a current account, must be reported by the banks, to the tax authorities. You have to quote PAN for cash deposits above INR 50,000, in a day. All cash deposits you make, which are above INR 2.5 Lakhs in a bank account, up to December 30th 2016, will be reported by the banks, to the tax department.
Don’t worry if you receive an Income Tax notice. You will be given a chance to explain the source of income and present supporting documents, regarding source of income. If you fail to explain the source of income, you have to pay tax and a penalty up to 200%, on the amount you have deposited with the bank. Want to know more on tax planning and loans. Just leave a missed call on IndianMoney.com financial education helpline 02261816111 or just post a request on IndianMoney.com website. IndianMoney.com offers Free, Unbiased and on-call financial advice on Insurance, Mutual Funds, Real Estate, Loans, Bank Accounts and capital markets.
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Never filed income tax returns? You could get a notice under Section 142(1) of the income tax act. You will have to provide all relevant information and records, which are demanded by the assessing officer. If this notice is accompanied by Section 143(2), you would have to attend the necessary proceedings, or send your lawyer. If the tax officer is satisfied with the explanation given, he will give you a clean chit. Otherwise he will calculate the tax demand, depending on the discrepancy between actual income and reported income.
If your deposits don’t match income tax returns filed, you could get a notice under Section 143(2). Your IT returns would be selected for a thorough scrutiny. The assessing officer could check your bank account details. You have to get in touch with the tax officer and submit the evidence he wants. You could also get a notice under Section 148. You get this notice, if the officer has evidence; you have not disclosed certain income in your returns. This could mean search and seizure.
Received an income tax notice? Don’t panic….Check with the tax officer. If you are an honest taxpayer, you have no need to worry.
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