Even if they do not have their names featuring in Panama Papers or have bundles of cash hidden in their homes, small taxpayers can still come under the scrutiny of Income tax authorities. Being a rare occurrence in the past, such cases have become quite common now. The tax department has become very strict to ensure tax compliance. Tax records have come under scanner and notices have been sent to individuals if any discrepancy is found in the computer-aided selection system.
Individual taxpayers have often been found out making some common mistakes, out of which some are just calculation errors whereas others are serious transgressions. These errors are so grave that taxpayers may be required to pay a penalty of up to 300% of their unpaid tax. Therefore, it is important for taxpayers to know where they are going wrong to avoid paying penalties.
These mistakes may be anything from not deducting TDS while buying new property to misusing Form 15G and Form 15H to avoid TDS. Not reporting the interest income can also pose a problem for taxpayers and is one of the most common mistakes made by them. Interest income usually goes unreported in the tax returns. Not reporting income of old job is one of the mistakes that people often make and can lead them to pay tax balance with an extra 1% interest on the same, in the case of delay, explains Mr Vaibhav Sankla, Managing Director of H&R Block India.
If you ever get a tax notice, the first thing that you should do is don’t panic. Most of the notices are just tax demands or non-filing reminders that can be dealt without a problem. For other notices, which are more grave, it is best to take help of a qualified tax expert.
Source : Economic Times