Had you ever faced any of the unwanted experience for not filing your Income Tax Returns? Here unwanted experience means receiving Income Tax Notices or an Income Tax raid at your house. Do you know why this happens? It’s because you lose the transparency between your income and tax paid while making yourself the victim of the IT department. This makes things more difficult when you intentionally avoid or ignore filing your Income Tax Returns.
Read further if you do not wish to fall into such legal notices and formalities. Also, if you have been already a victim of the IT department then this is a must-read for you. So here we go-
The Income Tax department is one of the most active departments who nab tax evaders and one of the trigger points by issuing income tax notices for not filing their IT returns year on year. In case if you receive any such notice, don’t panic. Be calm and patient and try to be stable. As you get stable after receiving the notice, you must carefully go through the notice and should understand what it is actually about. Not necessary that it must be bad news only as usually the Income-tax department sends refunds through notices only. So, better don’t get overstressed in case you receive income tax notice as it may be anything.
Related Article: Which ITR form to use for filing returns for AY 2020-21?
But if you wish not to receive such IT notices from IT departments, you can follow the below-given steps to avoid IT notices:
Appointing Tax Advisor
Appointing a tax advisor depends on the type or nature or notice you have received as compared to the tax and financial transactions that you have made. On the basis of that, you need to appoint an experienced and qualified tax advisor. It is necessary not to get confused between the tax agents and the tax advisors. Appointing a well-qualified and well-experienced tax advisor is not so costly, so better you go with that. The advisor will be in your service throughout the year and will guide you regarding the tax-related issues and transactions while helping you to stay away from any legal formalities and actions. This will ultimately result in saving a large sum of money while getting you a qualified advisory. It will also help you to avoid common mistakes people make while filing their returns.
Go thoroughly with your documents
In several instances, it often happens that we already have some accounts that we have forgotten about it. Even there are possibilities that some accounts remain as it is due to re-location overseas or due to some of the other reasons which ultimately results in stopping or neglecting to file the tax returns. Besides these, there are chances like we have taken some amount from friends, parents, or any acquaintance into our accounts or may have lent some money that we have not accounted for. Other instances may be non-declaration of properties or unused ad vacant properties. All these end up receiving income tax notices.
The penalties are imposed in the form of evasion of the property if you have not provided the details or necessary documents or related information while filing IT returns which you may have overlooked or forgotten.
Stop experimenting with your income & investments
Do not ever experiment with your finances and taxations. I repeat DO NOT! As later you may face severe consequences for that. Didn’t got it? Let me explain further! People usually set up examples like purchasing a property in the name of their wife or opt for a fixed deposit in their mother’s name. Do you really think that these would work? If you think so then you are strongly mistaken.
Instead of helping you, it will further complicate your tax filing and even more worst the person i.e., your wife or mother will be inquired further. This act may be termed as jugglery as you try to move your finances in different accounts and try hard to not come under the eye of IT department. But even if you do so and try hard to hide your financial assets, there are major chances that all this will go in vain as nothing can remain hidden from IT department. Believe it or not, they have entire information of your income and expenses made. You may receive an “unwanted” notice that surely you would not wish to receive.
In case if you receive an IT notice, you can consult the IT department itself as there are quite a few provisions in the IT Act where you can get many benefits. But all these are dependent on your circumstances. If you are fair then only the IT department may give you some relaxation or benefits. As a result, it is advisable to get proper advice, as well as act accordingly in order to, get refrained from whimsical transfers and transactions.
A financial planning platform where you can plan all your goals, cash flows, expenses management, etc., which provides you advisory on the go. Unbiased and with uttermost data security, create your Financial Planning without any cost on: http://bit.ly/Robo-Fintoo
Disclaimer: The views shared in blogs are based on personal opinion and does not endorse the company’s views. Investment is a subject matter of solicitation and one should consult a Financial Adviser before making any investment using the app. Making an investment using the app is the sole decision of the investor and the company or any of its communication cannot be held responsible for it.