Income tax department sends emails, SMS in case of tax mismatch: All you need to know

Those who pay total tax of Rs 10,000 or more in a year are required to pay advance tax.

The Income Tax Department has launched an e-campaign targeting taxpayers who have conducted significant transactions during the financial year. The department will notify such taxpayers via email and SMS, urging them to deposit the advance tax due on or before March 15, 2024. The exercise was started after the Income Tax Department discovered discrepancies between the transactions carried out by individuals and entities and the actual transactions. Taxes Deposited. The department said the purpose of the campaign is to encourage these taxpayers to deposit the “correct” amount as tax.

“The Income Tax Department has received certain information regarding specific financial transactions carried out by individuals or entities during the financial year 2023-24. Based on the analysis of tax paid so far during the current financial year, the department has identified the individuals/entities/2023-24 Entities whose tax liability during the financial year (FY 2024-25) is disproportionate to the financial transactions carried out by the concerned individuals/entities during the period,” the Income Tax Department said in a release on Sunday.

The Department receives information on taxpayer-specific financial transactions from a variety of sources. To increase transparency and facilitate voluntary tax compliance, this information is reflected in the Annual Information Statement (AIS) and is available for review by individuals/entities. Officials said the “significant transaction” value in the AIS was used to conduct this analysis.

What is advance tax?

This is an advance payment of income tax, not a lump sum payment. In other words, this is the tax an individual pays when they earn income. These payments must be made in installments as per the due dates prescribed by the Income Tax Department.

Who needs to pay advance tax?

Salaried individuals, freelancers and businesses with total tax liability of Rs 10,000 or more in a year are required to pay advance tax. If you are a senior citizen (60 years or older) and do not run a business, you are exempt from paying advance tax. This only applies to people with business income.

Furthermore, taxpayers who opt for the presumptive tax scheme under Section 44AD are required to pay the full amount of advance tax.