Income Tax Department has taken a very strict and important step to curb tax evasion and bring transparency in taxpayers’ income. The scope of the Annual Information Statement (AIS) of taxpayers has been greatly increased by the department. After this new change, it will be impossible for taxpayers to hide any kind of income or investment.
Income Tax monitoring of all transactions
Till now there were many financial transactions which escaped the eye of the Income Tax Department, but now all those transactions have come under the radar of AIS. As per the new rule, the department has now also included Goods and Services Tax (GST) returns, foreign investments made outside the banking channel and off-market share deals in the AIS. The decision directly targets people who try to hide their real income or secret investment information from the government.
Cross verification of details will be done
Due to this large database being collected by the Income Tax Department, accurate cross-verification of income of taxpayers will now become very easy. A new framework has been prepared for this by the Central Board of Direct Taxes (CBDT). Under this, the Director General of Income Tax (Systems) has been empowered to mandatorily upload the data on the portal within three months from the end of the month of receipt of the information. According to senior officials, the larger database will strengthen cross-checking of the information shown in the tax returns with other sources so that any irregularities can be easily caught during the investigation.
In this new change, foreign investment has been specially monitored. Earlier, information about normal transactions through the banking channel used to reach the department through TDS (Tax Deducted at Source). But some people used to invest in foreign derivative markets or unlisted companies through brokers or foreign agents to avoid tax, which escaped the tax trap. Now information on all these secret foreign investments will also become part of AIS.
Also, the most shocking thing about this update is that now one taxpayer’s Income Tax Return (ITR) information can be viewed in AIS of another taxpayer as well. This means that one person’s financial information can become evidence for another person’s tax audit. Earlier GST data was used only in scrutiny cases, but now it will appear directly in AIS. This will force taxpayers to declare their true income.
What to do if wrong information appears?
Taxpayers need not fear. If a taxpayer feels that any of the information mentioned in his AIS is incorrect or has been entered twice, the department has also provided an option for correction. Taxpayers can check their AIS through Income Tax e-filing portal or mobile app and submit their feedback against wrong entries through online or offline utility. In future, other information like donations will also be added to this. The main objective of this entire exercise is only that the citizens of the country report their income correctly and transparently.