If your income is very high but your expenditure is zero and yet you are living a luxurious life then there is bad news for you. The Income Tax Department may ask you for details of your daily expenses, like what shoes you wear, which salon you get your hair cut at or which restaurant you go to for food?
According to sources, the IT department is seeking details of household expenses. Some taxpayers are receiving notices from the IT department. They have been asked for information regarding hair cuts in salons and restaurants. Ration, electricity and gas bills have also been sought.
According to information received from sources, the IT department has also asked for details of cosmetics and perfumes from such people. IT sources say that these details have been asked in the faceless assessment. Such notices can be sent in cases of high income group. IT officials ask for such information in special circumstances. These details are asked in case of mismatch between income and expenditure in ITR. It is difficult to comment on the notice without DIN, PAN, AY.
Through this exercise, the IT department aims to find out whether these people are hiding their real income or making large transactions in cash, leading to tax evasion. This step by the Income Tax department is part of the government’s plan to use data analytics to curb tax evasion.
Sources in the IT department say that these notices have not been sent to everyone. It only includes high-income earners, who show a large income in their IT returns, but there is a huge gap between their lifestyle and the money withdrawn from the bank. In simple words, if someone lives a luxurious life, eats in expensive restaurants, wears expensive clothes but withdraws less money from the bank, then the department suspects that he has some other source of income, which he has hidden.
