The Income Tax Department is set to launch a campaign aimed at reaching out to certain taxpayers who have engaged in significant financial transactions but have not paid corresponding taxes and to ensure tax compliance. This initiative comes as part of the department’s efforts to ensure that taxpayers fulfil their tax obligations by the final advance tax collection date of March 15. The move follows the identification of individuals or entities whose tax payments do not align with their financial transactions during the current financial year.
According to a statement from the finance ministry, the tax department has obtained information regarding specific financial transactions undertaken in the fiscal year 2023-24. Upon analyzing the taxes paid thus far in the current financial year, the department has identified taxpayers whose tax payments are not proportional to their financial activities.
As part of its taxpayer service initiative, the department will conduct an e-campaign to notify the concerned individuals or entities about their significant financial transactions. Emails and text messages will be sent to urge them to accurately compute their advance tax liability and settle any outstanding taxes by March 15. These communications will be labeled as ‘Advance tax e-campaign-significant transactions for assessment year 2024-25.’
For taxpayers, the assessment year corresponding to the income earned in the fiscal year 2023-24 is 2024-25, during which tax returns are filed. The tax department receives information about taxpayers’ financial transactions from various sources, which is reflected in the Annual Information Statement (AIS) available on the department’s portal. The analysis is based on the value of ‘significant transactions’ as indicated in the AIS.
Taxpayers can access details of the significant transactions detected by the tax department by logging into their e-filing accounts and navigating to the compliance portal. Those who are not registered on the e-filing website must first register to view the details. This initiative aims to facilitate compliance for taxpayers and strengthen the department’s commitment to enhancing taxpayer services.
The tax authority utilizes information about financial transactions obtained from reporting entities such as banks, forex dealers, and sub-registrars to assess whether taxpayers have accurately reported their income. The AIS includes details of interest, dividends, securities transactions, mutual fund transactions, and foreign remittances, providing a comprehensive overview of the taxpayer’s financial activities.
The Income Tax Department’s campaign underscores its efforts to ensure tax compliance and fairness in the tax system by addressing discrepancies between taxpayers’ financial transactions and tax payments. Through targeted communication and enhanced taxpayer services, the department aims to promote voluntary compliance and strengthen tax administration.
