Have income tax refunds? Keep deduction proofs ready or get ready to pay 200% penalty
Taxpayers are receiving automatic online notifications from the Income Tax Department if additional deductions are claimed in the Income Tax Return (ITR), resulting in an income tax refund from the tax deducted at source (TDS) by employers. Such notifications are generated automatically if there are discrepancies between the figures mentioned in Form 16 and the figures entered in ITR, resulting in a tax refund.
Taxpayers are receiving automatic online notifications from the Income Tax Department if additional deductions are claimed in the Income Tax Return (ITR), resulting in an income tax refund from the tax deducted at source (TDS) by employers. Such notifications are generated automatically if there are discrepancies between the figures mentioned in Form 16 and the figures entered in ITR, resulting in a tax refund.
Following the issuance of the auto-generated notification, recipients will have 15 days to revise their returns to correct any discrepancies with Form 16 or face a 200 percent penalty if deductions are claimed falsely.
“Many taxpayers got such intimations last year also,” said CA Karan Batra, Founder and CEO of CharteredClub.com, adding, “It is not a tax notice, but a gentle reconfirmation.”
In the event of a genuine claim, you must keep proofs of investments (such as subscriptions/investments in NPS, PPF, SSY, NSC, SCSS, tax-saving FD, ULIP, ELSS, etc.) and/or expenses (such as payment of life/health insurance premiums, receipts for children’s tuition fees, home loan interest and repayment of home loan principal, etc.) and/or proof of donations given, etc.
This is due to the possibility of receiving a proper Income Tax Notice following manual verification of the auto-generated intimation if the ITR is not revised within the 15-day period.
“Although the probability is low, it may still happen,” said Batra.
In this case, you may have to upload the investment proofs in the slots provided on the e-filing portal to avoid paying a 200 percent penalty.
So, if you have made tax-saving investments, deductible expenses, or donated money to organisations eligible for tax deductions under Section 80G of the Income Tax Act but have not disclosed these to your employer for TDS benefits, keep the proofs of such tax-saving investments, expenses, or donations handy to avoid any inconvenience.
