50 Lakh Rupees or More in Hidden Income? Tax Department Can Examine 10 Years of Records.

Taxpayers should be aware that hiding income when filing their Income Tax Return (ITR) can lead to serious consequences. According to new rules, if a taxpayer hides an income of 50 lakh rupees or more, the Income Tax Department has the authority to investigate their financial records for up to 10 years. This means that the department can examine a taxpayer’s bank accounts, property transactions, and other financial dealings.

Tax experts suggest that taxpayers should avoid making any errors while filing their tax returns. If a taxpayer hides income, the Income Tax Department can send them a notice, scrutinize their financial accounts, and even take legal action, leading to penalties or imprisonment. Experts suggest that taxpayers should be honest and ensure that all sources of income are accurately reported in their tax returns.

Currently, the Income Tax Department is increasing its scrutiny of suspicious accounts. These could include hidden assets like gold, cash, or shares. The department is preparing to send notices to taxpayers whose accounts seem questionable. This is part of a broader effort to crack down on tax evasion and financial irregularities.

It’s also important for taxpayers to keep track of expenses related to major events like weddings or other celebrations. If these expenses aren’t recorded properly, the Income Tax Department could charge a high tax rate of up to 77.25 percent.

Previously, the Income Tax Department could only investigate records from the past six years, but recent changes have extended this to 10 years in certain cases. To avoid getting into trouble with the tax authorities, taxpayers should always file their taxes honestly, keeping detailed records of income sources and significant expenses.