While processing Income Tax Returns filed on or before July 31, the Income Tax department is using Artificial Intelligence Software to find out the correctness of various deductions/exemptions claimed by the taxpayers. The notices are being issued in mostly those cases where TDS was deducted and a claim for refund has been filed in the ITR. The taxpayers are getting notices through email to furnish the evidence or proof as requested within the period prescribed by the Income-tax.
In this regard, many taxpayers are getting an email saying that if the taxpayer does not have proof of investment or if the taxpayer has taken the wrong exemption/deduction in the Income Tax Return, then they should immediately verify the same and revise the return. The purpose behind these notices is to reduce or correct the refund.
The reason given in the notice for salaried persons is that the deduction is much higher than that mentioned in Form 16 issued by the employer. So verify the claimed deduction/exemption in the Income Tax Return and match it correctly with Form 16. In the notice being sent to the businessman, it is being written, “There has been a decrease in the Gross Total Income (i.e Total Income) declared by you, verify it.” It is also written that the purpose of this email is to warn you about any wrong claim, and you can also match it with the income shown in AIS.
A notice is being sent to the taxpayer by marking the exemption of interest on home loan, exemption of rent, any other tax free investment. Taxpayers who are receiving such notices should first collect evidence of all the investments claimed by them.
If the taxpayers do not submit the document within the time period mentioned in the notice, the claim of deduction/exemption will be rejected and the tax demand will be raised.
It is better to revise the Income Tax Return even if the proof of deduction/exemption is not with the taxpayer; otherwise the addition in assessment may attract additional interest and 200% penalty. The penalty can be avoided by revising the return.
