Income Tax Department is asking for details of monthly expenditure from high-income earners. This step has been taken to prevent tax evasion. This step is part of the government’s larger plan in which data analytics is being used to prevent tax evasion.
New Delhi. The Income Tax Department is now keeping an eye on those people who earn a lot but withdraw very little money from their bank accounts. The department has sent notices to such people and asked for complete details of their monthly expenses. This includes groceries, clothes, shoes, haircuts, eating in restaurants, flour, rice, spices, cooking oil, gas cylinders, cosmetics, children’s education and complete information about family members.
According to media reports, the department’s aim is to find out whether these people are hiding their real income or making large transactions in cash, which may lead to tax evasion. This step is part of the government’s larger plan in which data analytics is being used to prevent tax evasion.
Officials say that these notices have not been sent to everyone but only those people have been targeted who show huge income in their returns, but there is a huge difference between their life and the money withdrawn from the bank. In simple words, if someone is living a luxurious lifestyle, eating in expensive restaurants, wearing nice clothes, but withdrawing less money from the bank, then the department suspects that he has some other source of income, which he has not disclosed.
It is also possible that he is doing transactions in cash, the account of which does not reach the government. That is why the department has now started asking for details of every small and big expenditure. In November last year also, the department had run a similar campaign. At that time, notices were sent to those people who had hidden their foreign income. This information was received from the exchange of information between tax officials around the world.
Like that campaign, this time also the focus of the department is on those people, whose expenses and income seem to be a bit wrong. An official of the department said that these are not ordinary notices. These are especially for those people who live a luxurious life, but from the bank’s activity it seems that they spend very little. In such a situation, the question arises that from where is the money coming to them.
According to the department, this action is being taken only on selected high net worth people, about whom concrete information has been received that they are showing less of their real income. An official clarified that if there is a coordination between your income and expenditure, then there is no need to panic. But if you live a luxurious life and your withdrawals from the bank are negligible, the department will seek an answer from you.
Its purpose is to ensure that no one can escape tax by hiding their income. Now, from grocery items to haircuts, everything is under the scrutiny of Income Tax.
