February 05, 2024

TDS deducted, ITRs not filed? Expect an Income Tax Notice Soon!

In the realm of income tax compliance, staying informed and timely filing of returns is imperative. The Income Tax Department is gearing up to send notices to individuals who have not filed their income tax returns (ITRs), even if their income tax has been deducted at source (TDS). Central Board of Direct Taxes (CBDT) Chairman Nitin Gupta has assured that these notices will only be sent to taxpayers for whom the department has definitive information.

Enhancing Taxpayer Services

Chairman Nitin Gupta emphasized the department's commitment to enhancing taxpayer services. This includes streamlining the refund process, updating returns, and resolving significant tax disputes. The CBDT has established a demand management center in Mysuru, initially focused on tax disputes above Rs 1 crore. This center brings together chartered accountants, assessing officials, and taxpayers to collaboratively resolve disputes, a commendable initiative that was initially confined to Karnataka but now extends its reach across India.

Key Points to Note for NRIs

For non-resident Indians (NRIs) earning income in India, compliance with tax regulations is crucial. Here are some essential points to consider:

Exemption Limit: NRIs should file their returns if their income exceeds the INR 2,50,000 basic exemption limit, as deductions alone won't exempt them from filing.

TDS Deduction: Income from property, shares, mutual funds, and more may face TDS. Filing a return is necessary to claim a refund of excess tax deducted during the year.

Total Taxable Income: If total taxable income in India surpasses Rs. 50 lakhs, providing financial statements with the return becomes mandatory for compliance.

Due Dates: Stay informed about due dates for filing returns – 30th September for audited accounts and 31st July for others. Missing these deadlines can lead to penalties.

Why Compliance is Crucial for NRIs

Being non-compliant may not only be a breach in India but could also have consequences in your host country. Here are reasons why NRIs must prioritize filing returns:

Global Impact: Non-compliance may not be a serious offense in India, but it could be viewed differently in your host country, impacting your global financial standing.

Double Tax Avoidance Agreement (DTAA): Filing returns in India is essential for claiming benefits under DTAA in your host country. Compliance ensures you don't miss out on potential tax-saving opportunities.

Conclusion

As the Income Tax Department gears up to send notices to individuals with TDS deductions but no filed ITRs, staying informed and taking timely action is crucial. Ensure compliance to enjoy the benefits of a hassle-free financial journey. Mark your calendars, stay updated, and let us assist you in navigating the intricacies of income tax regulations.