The deadline for filing Income Tax Return (ITR) for individual taxpayers for the assessment year AY 2022-2023 was July 31. The Income Tax Department is processing income tax returns and many taxpayers may get notices for a variety of reasons including calculation errors, not reporting income correctly or evening while claiming excessive loss.
The IT department is verifying the refunds claimed by the taxpayers for TDS deduction. The department is using Artificial Intelligence (AI) enabled software to investigate such claims and send notices for discrepancies.
An assessee may get such notice for claiming multiple refunds under different sections of the Income Tax Act. Taxpayer may receive a mail from IT department to verify and revise ITR if proof of investment is missing or wrong exemption is claimed. The business league’s website reported that notices are being sent to individual taxpayers with the aim of reducing or modifying the refund amount.
Such notices are being received by taxpayers and small traders claiming exemption under Section 80G of the Income Tax Act. Section 80G of the IT Act allows exemption for various contributions made in the form of donations to special relief funds and charitable institutions.
The IT department is sending notices to the salaried class for excess refunds or mismatches claimed in the amount mentioned in their Form 16. Businessmen are getting notices for showing excess damages or false claims. Notices are also being sent to taxpayers for claiming exemption under various heads like investment, interest on home loan and rent paid under Section 80C.
Penalty for wrongful exemption claims
Adding to the assessment a taxpayer may have to pay a 200% penalty and additional interest.
what should you do?
So if you are a salaried employee, verify the refund claimed and tally it with the deduction mentioned in Form 16. Also, reconcile your deductions with Form 26AS. TDS amount should be same in both Form 26AS and Form 16 or 16A. If you do not find any information for deducting TDS in these forms, ask the concerned deductor to update your report. After receiving such notice, you should first collect proof of all investments and revise the ITR filing within 15 days.