Bought something expensive? Now, wait for IT Department's 'advance tax' reminder
The SMS and email alerts sent by the tax department to such taxpayers ask them to verify the transactions under e-campaign tab of the compliance portal, which has been created under the income tax department's Project Insight initiative
The tax department last week sent thousands of reminders to taxpayers who had made high-value transactions in 2020-21 and asked them to pay 'appropriate advance tax', if needed, on those transactions.
The SMS and email alerts sent by the tax department to such taxpayers ask them to verify the transactions under e-campaign tab of the compliance portal, which has been created under the income tax department's Project Insight initiative.
Shailesh Kumar, partner, Nangia & Co, confirmed that such SMSes have been received by many taxpayers - both individual and corporate - across the country.
"The tax department has alerted the taxpayers that they have noticed high-value transactions against their PAN, and that they should go to the compliance portal of the department and verify if these transactions have indeed been made by them," he said.
Rajat Mohan, partner, AMRG & Associates, said that the tax department has been sending a lot of text messages and reminders ahead of the last date for paying advance tax on 15 March 2021.
Under Project Insight, the tax department has been using data analytics and information sharing methods to gather information about every financial transaction that taxpayers have made. The information about these transactions is then made available to the taxpayers through the compliance portal.
The tax department then uses emails, SMS and other methods to inform the taxpayer if these transactions are not reflected in their returns and encourages them for voluntary compliance and resolution of compliance issues, if any.
Project Insight, a comprehensive big data, analytics and surveillance project of the tax department, has helped income tax department to not only identify non-filers but also those who are paying much lower taxes than they are supposed to. Non-filers and potential tax evaders are identified by analysing information fetched through Annual Information Return (AIR), Statement of Financial Transactions, TDS/TCS statement, securities transactions.
Based on information received from these sources, the tax department prepares a profile of a taxpayer and then matches the income disclosed with his/her profile.
Dhaval Jariwal, a Mumbai-based chartered accountant, told BusinessToday.In that people do not always check their Form26A or the compliance portal, where the updates of such high-value transactions are made. That is why tax department sends reminders to alert people, he added.