How the Income Tax Office Monitors Your Income Information

The Income Tax Bureau has increased its examination of unreported income to combat tax evasion. Presently, all high-value transactions require PAN submission. Property registrars and the financial organisations you deal with, such your bank, insurance provider, mutual fund company, and credit card business, submit information to the tax department about your significant transactions. This information is compared by the tax division with the tax returns you submit.Also, the increase in internet usage and the tax evaders' social media profiles provide income tax investigators with a lead. The IT department monitors tax evaders and other people who present themselves as wealthy on social media through Project Insight.

After receiving bank alerts, income tax officials working on Project Insight look into the suspected tax evader's social media account. For instance, a person gets charged a 1% luxury fee if they purchase a car that costs more than Rs 10 lakh. In these situations, the IT division will check the person's income tax returns to find out more about his finances and their sources. Also, IT personnel has the right to request that the bank provide information about its income for verification.

The department analyses and matches income with the person's expenses and investments using these hints to determine whether or not the right tax liability involves tax evasion. The following are some methods that the tax office tracks your high-value transactions:

1) Your bank will alert the tax authorities if you deposit cash, make a demand draught, or make fixed deposits totaling up to or beyond Rs 10 lakh in a fiscal year across numerous accounts.

2) Any sale or purchase of real estate costing more than Rs 30 lakh must be reported by the property registrar.

3) The buyer is required to withhold TCS (tax collected at source) at the rate of 1% and deposit the money with the tax office if a property is purchased for more than Rs 50 lakh.

4) Businesses must report to the tax authorities any purchases of mutual funds, stocks, and debentures totaling at least Rs 10 lakh.

5) If you make more than Rs 50 lakh a year, you must list your assets and debts on a new ITR (income tax return) form.

6) Any purchase of goods or services that costs more than Rs 2 lakh must now be declared using a PAN.