NEW DELHI: If you have done heavy cash withdrawals, large cash transfers or enjoyed luxury holidays after 2016, be ready with proper documentation because the income tax (I-T) department is likely to seek an explanation.
Sources say, the I-T department is gearing up to clamp down on tax evaders and is mulling steep penalties for higher-than-disclosed income and unexplained expenditure as well as cash transactions.
“While we will protect honest tax payers, starting this year the department will closely monitor any incident of tax evasion in I-T return form with strict penalties,” said a senior official.
He explained that if someone has withdrawn or deposited heavy cash, spent large amounts on luxury holidays that don’t match with one’s income, or has spent a lot on credit card, it will be open to close scrutiny.
If there is mismatch between the income disclosed and savings or expenditure, it could result in penalties going as high as 83.25%, the official said.
If the tax department detects undisclosed saving, cash at home, gold jewellery or other valuable article, the value of such items will be deemed as the income of the taxpayer under Sec 69A of Income Tax Act.